Despite a direct reporting line to the Board and or its Audit Committee, the perception of the value of internal audit department remains low. The executive management rarely appreciates the impact of the internal auditor to the business.
The failure by IA to add real value to the organisation has reduced the value of the profession from the perspective of management. IA must offer pragmatic and proactive insights to management on strategy and risk management – the key challenges of any business.
This is not so. The end result is general poor remuneration of Internal Auditors and lack of good facilitation of the department. IA must acquire new skills, be all-rounder’s and position IA as a missing link in the organisation’s governance and strategy puzzle. When the CEO, any senior management member or Board member needs to take any action – operational, strategic or otherwise, should have internal audit first on their mind for their insights. Until this is achieved, IA shall not be recognized as value adding as it should be.
When I find an internal auditor more involved in payment vouchers, I know they have lost direction. To offer value, IA may become a strategic adviser not one to go to when things are bad. Take the case of the in-house lawyers, their value is high and no decision ever passes without their knowledge. I know IA must remain independent of management. And I know this is the best way for IA to be valuable as they have a bird’s view and access to the organisation and are in a better position to offer informed insights to management than any other professional.
Until that is done, IA risk retiring old and poor. The poverty of not having played a key role in major decisions in your career is worse than poverty of the bank account. To read my full paper, click here find the paper, examining the role of IA. So how do you position IA as a critical role in your organisation? How do you get the CEO appreciate the role of internal audit and compensate the professionals better? Let me know your views.