The Evolving Role of Internal Audit

The internal audit profession is changing. As the risks for companies change in this ever-evolving, ultra-connected global economy, board members need assurance on concerns beyond traditional risks. Areas such as cyber security, regulation and corporate culture are now more top of mind for companies than ever before.

With both a broad and focused view of the organization, the internal audit function is often uniquely positioned to help business leaders identify issues within their company that may otherwise go unnoticed.

By advising management and the board regarding critical issues and trends; monitoring compliance with laws and regulation; and evaluating whether policies and procedures are being followed; chief audit executives can help leaders identify and mitigate risk as well as capitalize on opportunities to improve operations, reduce costs, enhance revenues, or improve profits.

Challenges for CAEs

As their role evolves and expands, more challenges arise for chief audit executives, including:

• Auditing and reporting on the sensitive topic of corporate culture
• Obtaining board buy-in of the CAE’s value proposition and being viewed as a trusted advisor on emerging risks and strategy
• Keeping up to date and adapting to regulatory changes and trends
• Maintaining adequate skillsets to respond to adapting roles and expectations

To help chief audit executives stay on top of emerging issues within the profession and address concerns such as those listed above, Kaufman Rossin formed the Chief Audit Executive Advisory Council, an invitation-only, peer-level forum composed of 15 leading internal audit executives representing some of largest industries and companies in South Florida.

The group’s first meeting centered on the tricky topic of auditing corporate culture.

Auditing corporate culture

Council members agreed about the importance of culture and the value that internal audit can bring in that area. However, they also agreed it can be a difficult line to walk given the assessment is directly over the individuals being reported to. Auditing culture can reveal issues at the top, which is why obtaining buy-in from company leadership is a critical first step in the process.

“It is indeed important to audit the culture, but you can’t do it without the support of the CEO, management and the board,” said Tom Rothrock of MasTec.

Tackling other issues also requires stakeholder buy-in, but culture is particularly sensitive because of the potential implications for management, and so presenting the findings from such an audit can sometimes be as challenging as performing the audit itself.

Looking ahead

The current political and business environment is dynamic to say the least, with new developments every day. What will these developments mean for the internal audit profession and how will the role of chief audit executives continue to evolve? Stay tuned as we explore those developments as well as the topics above in future CAE Advisory Council meetings and share those insights with you on our blog.

Contact me to learn more about how to navigate internal audit challenges at your organization.