​​​Two Recent Surveys Provide Food for Thought

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The  Association of Chartered Certified Accountants (ACCA) held its annual conference in May. It asked participants to vote on a number of issues. The results (shared by Prof. Andrew Chambers) included:

  • Do you agree that boards operate in a partial assurance vacuum? 60 percent agree and 24 percent strongly agree.
  • Do you believe CAEs should provide overall assurance opinions? 78 percent said "yes."
  • Could internal auditing fill the board's assurance vacuum? 26 percent said "substantially," 40 percent "much more than currently," and 35 percent "to some extent."
  • Should it be mandatory for boards of public interest entities to receive independent assurance about the management of external and internal risk?" 95 percent said "yes."
  • Do you believe that the internal audit organization is taken more seriously than it was two years ago? 82 percent said "Yes."

​Also in May, the Open Compliance and Ethics Group (OCEG) published the results of a One-Minute Poll on the issue of internal auditing. OCEG's members are already committed to and actively interested in risk management, so the results are probably not indicative of the entire population. Even so, they are informative.

  • Should internal auditors, including those at major banks, insurance companies, credit agencies, etc., share in the blame for the current global economic crisis? 48 percent said "Yes," 27 percent "No," and 25 percent "Not Sure." 
  • In answer to the same question, 38 percent of the internal auditors who answered the poll responded "Yes." 40 percent responded "No," and 22 percent were not sure.
  • But 70 percent of finance professionals said internal auditors were at least partly to blame; more than half the risk officers and about half of those responsible for compliance agreed. 52 percent of lawyers were not sure, but almost everybody who had a view thought internal auditors had fallen short.
  • Is the internal audit profession capable of evaluating the effectiveness of an organization's risk management system? The overwhelming answer, with a nod towards variation in skills among auditors, was "Yes" (97%)! Auditors self-assessed at the same level.
  • Has the internal audit function at your organization assessed and reported on the effectiveness of its risk management system? 43 percent answered "Yes."

So what conclusions can you draw from these surveys. This is what I make of it:

  1. Internal auditors are essentially alone, among those who have an opinion, that we share in the blame for the current global crisis.
  2. The fact that we have such a different view implies we have work to do in the advocacy area.
  3. There is an assurance role at the board level that we can and should fill, through assessments and reports on management's risk management process.
  4. The argument that internal auditors do not have the capability to assess the risk management process and provide a formal report to the board and executive management team is not consistent with the views in the surveys.

I welcome your comments.​​



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