Expanding the boundaries of internal audit.
People are expanding the boundaries of internal audit, some going farther than we might imagine.
Blogs Mike Jacka, CIA, CPA, CPCU, CLU Dec 02, 2021
Here's an interesting fact. According to my pree-cise calculations (in other words, I think this is right, but don't take that bet to the casino), this is my 800th blog post. That … is a lot of words. In fact, almost 575,000 of them. And I'm not sure what should scare you more: that I have done that much writing or that I know how many posts and how many words I have written.
Recently, I went through some of those posts and recognized something that has been pointed out by more than one person. I can come off a little negative. In fact, it seems I spend more time ranting, raving, railing, and raging about the current state of internal audit than I do talking about the things we do well.
Well, to paraphrase a common bumper sticker, "If you're not mad, you're not paying attention." And my passion comes from a good place. I think internal audit is one of the best professions out there, and I do not want to see it fade away because of neglect. There is a lot of complacency in the internal audit world, and you do not turn off complacency by uttering phrases of great calm. Because I believe in the sleeping giant that is internal audit, I feel the best way to wake that giant is to scream in its ear. To quote the Twisted Sister song "Wake Up (the Sleeping Giant)":
Long ago and far away
We had a voice, you know that we had a say
We won't live for yesterday.
Ready or not, we're gonna have our way.
We need to realize we've lost that voice, we can't live for yesterday, and we need to have our say.
That was part of the message/sermon I was delivering/preaching in my most recent post. And if I hadn't been careful, that tirade could have wound up being my 800th blog post. But I didn't want that. I wanted something different for this milestone. I wanted to shed light on the hope and opportunities that exist in internal audit. Because, for all my wailing and gnashing of teeth, there are a lot of good things going on in the profession.
(And with that, I finally get to the point. My apologies. But, if you have read even a smidgen of the previous 799 posts, you know that getting to the point is not my long suit.)
I look back at my 35+ years in the profession, and I see steady progress. (In the profession, not in myself. File my attempts at progress under "Lost Causes.") In my day (as the old-timers say), we just reported things (no corrective actions), operational audits were an unnamed luxury, we performed our work using the cycle of audits (risk-based auditing joining operational audit in the pantheon of mythical, internal audit creatures), and there was a lot — a lot — of compliance and finance work. And while I know a lot of shops are still mired in these quagmires (along with the SOX subsummation), there are a lot of shops that are exploring new and different things.
Such progress is a good thing. But I am also seeing signs that bigger changes are afoot. And I want to give you a few examples that crossed my path in the last few weeks.
A sure sign that the profession has not given up and is trying to move forward is reflected in what is being written about the theory and practice by those involved in the theory and practice. Yes, I know written words can only do so much. But the more that is written and the more that is said, the more those ideas become a part of the work that is being done. Let's look at one of the best pieces I've read in a long time.
Hal Garyn has been a thought leader in the profession for a long time, with a list of bona fides that put the rest of us to shame. In a short piece titled Six Common Internal Audit Miscues to Avoid, he shows how formal and pedantic approaches to internal audit can be harmful to the individual department, as well as the profession. He articulates the things people do wrong in internal audit and, in the process, outlines how internal audit can be better than the strictures we place on ourselves. He is nice enough to call them miscues, but they are foundational errors and obstacles to success. (Hal, if I misunderstood or overstated what you were saying, feel free to let us all know.)
There are also a lot of people trying to figure out how to make the work of internal audit go better. We've all had to learn new approaches to our work as the world moves into what feels like some weird part of the multiverse. But some people are making significant strides in changing how we might get work done.
Bryant Richards, a former head of internal audit and current professor with Nichols College, is taking giant steps (there's that giant again) helping the profession better use new and developing technologies. He has established the Center for Intelligent Process Automation (CIPA), which brings together students and professionals to help implement digital transformation. More specifically, CIPA is helping auditors, accountants, and all business professionals understand the power of Robotic Process Automation (RPA), including using the tool as a potential steppingstone to AI. (And Bryant, if I've gotten any of this wrong, I know you, too, will be more than happy to correct me.)
And finally, there is something I recently saw from Protiviti — the video that made me realize there are people really stretching the idea of what internal audit needs to know, needs to do, and needs to be. I have no idea how this popped in my inbox, but I saw the name Michio Kaku paired with Protiviti and I instantly clicked through to see what was going on.
For those who don't know, Michio Kaku is a theoretical physicist, futurist, and bestselling author who uses science to help us everyday people understand what the future may have in store. And that is exactly what you will see in this video — a discussion that starts out being about the future of cities, but wanders into advanced AI, brain net, fusion power, and digital immortality.
Not a word in the discussion about internal audit. The listener has to fill in those blanks. And I know Protiviti is much more than just internal audit. But, again, this popped in my inbox as an internal audit related piece. And, no matter what you might think, everything Kaku is saying needs to be understood and applied by any internal auditors smart enough to know the future is what we are supposed to be concerned about.
The video is extraordinary in its own right — the idea that internal auditors should be interested in and hear Kaku's comments. But it appears to be part of something bigger; Protiviti seems to be developing content around the concept of vision — exploring transformational forces that will impact all of us. It looks to me to be an attempt to help professionals understand and be prepared for the incredible changes that are coming. More specifically, a chance for internal auditors to really explore the future and, by exploring that future, better understand the risks, opportunities, and vision of what may be in our clients' futures. (And to anyone at Protiviti, just as I said to Hal and Bryant, if I have misunderstood what is trying to be accomplished, let me know.)
I was recently rereading a leadership book a friend gave me many, many moons ago — Radical Leadership by Steve Farber. The author talks about four aspects of leadership. The one that caught my eye was "to inspire audacity." He goes on with the question. "How are we going to change the world?"
There it is folks; that's the question internal audit should be asking. Not just what is on the schedule, what are the risks, what does the client want, or what changes are occurring. But asking how we are going to change the world. And, in the examples I've provided, I see the profession taking steps toward that audacity.
Now, how are you going to respond?