Skip to Content

The First to Go

Blogs Mike Jacka, CIA, CPA, CPCU, CLU Jun 30, 2020

I listen to sports talk radio when driving. It is relatively mindless and, because my trips are generally of short duration, the mindlessness doesn't become overwhelming.

Of course, sports talk radio, just like any industry, faces interesting challenges. Face it, it's hard to find anything to talk about when you are supposed to talk about sports and there are almost no sports to talk about. Korean baseball has become a big time-filler for these guys.

So, the majority of announcers spend their airtime lamenting the absence of sports, in particular, waxing poetic on how the world needs sports, that sports are fundamental to our culture, and that our society cannot effectively continue without sports.

Allow me to speak for non-rabid sports fans and non-fans alike. Get a grip. Yes, the lack of sports has been a loss for some of us. (And the economic impact has been decimating.) But there are many other things in this world that are more important.

And, other than the sports pundits, I don't hear a lot of people spending a lot of time lamenting the lack of sports. Yeah, people may indicate they miss it. But, if the sports world's disappearing act were to continue, there might be sadness and nostalgia (half of sports is nostalgia), but, somehow, we'd all get along.

Which brings up an interesting point; as the world becomes pandemically changed, what else is there in the world that we all thought we couldn't live without — felt was an integral part of societal fabric — that might slowly (or quickly) disappear without being missed?

And, how often do internal auditors take for granted that we are so integral to the success of an organization that our continued existence is assumed? (You can see where this is going, can't you?)

I worked for a horrible manager. And, for a while, the local management team (nonaudit) thought he was doing a really good job. Why? Because he never reported any problems. In senior management's view, audits with no findings were good audits. And no audit findings meant it was a good audit department.

But if things had continued in that vein, would senior management begin wondering why they even had an audit department?

Let's put it another way. If the audit department had disappeared, would anyone have noticed? Or, to more closely align with the present situation, if senior management was looking for something that wouldn't be missed, would internal audit be the first to go?

Do they know you exist and, perhaps more importantly, why?

One thing we have learned from the last few recessions is that internal audit can be ripe for some of the first axes. And don't look now, but it is already starting. In a recent survey from The IIA titled COVID-19: Longer-Term Impact on Internal Audit, some stats indicate our existence may not be the foregone conclusion we would like it to be. 45% of respondents expect a budget decrease for internal audit in the next 12 months, with 27% seeing decreases in staffing budgets.

Because this is a quick survey, we can't know the stories behind these stats. But I don't think any of us are surprised by these numbers. In fact, if we were surprised, I think it would be that the percentages are not as large as expected. And I further believe that the trend will increase, that in some organizations internal audit will be the place to go for quick budget cuts.

Much like what could happen in the sports world, we might be seen as "nice to have," but not a necessity.

And the fault is ours. As professional internal auditors, we can cite chapter and verse why we are instrumental to the organization's success. We know we are the foundation to solid governance, and we have an important role in the organization's ability to achieve its objectives. But do any of our clients really understand the impact of what we do?

Would anyone notice if we were gone?

I do not believe there is any way professional sports will disappear. It is going to take a few hits, but it will be there in the future. And I believe that internal audit will continue to exist. Some shops will take significant hits — some may disappear — but the profession will continue.

However, if we are not careful, we will be threatened by the same thing sports faces — being considered a nice entertainment that might become a nostalgic memory.

If we are remembered at all.

Mike Jacka, CIA, CPA, CPCU, CLU

Co-founder and Chief Creative Pilot, Flying Pig Audit, Consulting, and Training Services (FPACTS), based in Phoenix.