Is Internal Audit lacking in leadership skills?
If you read the original version of the article by Tammy Whitehouse just republished in the October issue of ComplianceWeek, you might be tempted to say “yes”. While the title of the October issue is as a question, “Is internal audit lacking” (no link because it is only available to subscribers in print form), the original version was entitled “Studies find internal audit lacking in leadership skills”. Not stated as a question but as a fact.
After a storm of protest by internal audit practitioners that the underlying research by PwC and the IIA had been misrepresented, the Managing Editor of this otherwise excellent publication blogged a response (recommended reading). He acknowledged that many leaders of internal audit functions had excellent leadership skills, and said that he believed (and he thought the studies supported in his belief) that lower level internal auditors had room to improve. Well, all of us have room to improve.
Let’s have a look at the updated piece and see if we agree with the comments. BTW, I find it curious that the only people quoted are consultants and service providers, with the sole exception of Richard Chambers (IIA President and CEO). There are no words of wisdom from any current CAE.
Here are some excerpts:
- “Many internal audit departments are caught in a kind of feedback loop – eager to help steer organizations in a new direction, but struggling to demonstrate their ability to be agents of change”.
- Comment: that is not consistent with my personal experience. More CAEs than not are effective agents of change.
- “Internal auditors are still trying to put down their pencils and lift heads so they can take a broader look at organizational risk”.
- Comment: this picture of an auditor using a pencil, focusing on small stuff, is demeaning and not representative, IMHO, of the state of internal auditing.
- “Internal audit departments need more ‘maverick’ leadership to gain more clout with boards and demonstrate more expertise in identifying and addressing risks.”
- Comment: I agree with Dipak Shah, who said this. While many CAEs are ‘rock stars’, we need more.
- “Internal auditors let their critical thinking skills stagnate while they tackled the mountain of SOX internal control issues”.
- Comment: this is contrary to my observations. Auditors can and do use their gray matter every day.
- “Internal auditors are really losing ground right now in being able to demonstrate their value”.
- Comment: this is my blog so I feel able to say this is nonsense.