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Inside Internal Controls

News and discussion on implementing risk management

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Deloitte Internal Audit 3.0 has major flaws

Earlier this year, Deloitte published Internal Audit 3.0, The future of Internal Audit is now. It’s great that they are encouraging internal audit departments to change so they can meet modern demands, but their presentation that they are offering something novel and disruptive is way off the mark.

 

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Why are SOX compliance costs increasing so much?

From a recent survey by Protiviti, the information on how many organizations had to issue a cyber-security disclosure is interesting. Apparently, this generally resulted in an increase on SOX compliance hours – although the reason for a significant increase is not clear.

 

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Talking about inherent and residual risk

Are organizations unnecessarily risk averse? That can be crippling in many ways, including slowing agility and decision-making as well as failing to take advantage of opportunities.

 

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The role of internal audit in risk management

If we are stressing that risk management is really all about effective, informed and intelligent decision-making, shouldn’t internal audit start focusing on the quality of decision-making processes?

 

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Is it a management or board failure when no action is taken on audit findings?

How effective are your organization’s internal audit reports? An effective internal audit report and proper communication on the part if IAs can promote appropriate action on the part of management and the board.

 

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How significant is the risk of fraud?

fraud

The best resource for understanding the level of fraud risk is the Association of Fraud Examiners’ (ACFE) annual Report to the Nations, their global study of occupational fraud and abuse. Their 2018 Report is now available and, as always, shares some useful and important insights. The ACFE analyzed 2,690 cases from January 2016 to October 2017 from around the world (48% from the USA, the rest evenly split among other regions).

 

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The worst audit report I have seen

I have seen a few candidates for this title, but one stands out. This is how I described it in my best-selling book, World-Class Internal Audit: Tales from my Journey:

 

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Can you manage technology risk in today’s environment?

This is a new world and we need to re-examine traditional techniques for addressing technology risk. Before assessing and testing controls, challenge management on whether they believe effective security is in place and why. An internal audit team can help with this.

 

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Internal audit and ERM accused of failing to hit the mark

The consulting firm CEB (now part of Gartner) published a piece in 2014, Executive Guidance: Reducing Risk Management’s Organizational Drag. It has been used recently to support an argument by a critic that both internal audit and ERM are failing.

 

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Deloitte on internal audit and the path forward

Nine areas of focus have come out of the results of Deloitte’s latest survey of chief audit executives (CAEs) with recommendations for action. The survey, which has been widely reported, indicated that in the opinion of the responding CAEs only 28% of them “believe their functions have strong impact and influence in their organizations, while 16 percent felt that Internal Audit has little to no impact and influence”.

 

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Are your internal auditors present?

The audit plan should reflect reality, not ivory tower beliefs. How confident are you that your audit plan addresses the risks as they appear in the front lines? Is that acceptable? If not, what are you doing about it?

 

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The state of the internal audit profession

I don’t believe internal audit is “losing prestige”. My belief is that internal audit can and should do more to deliver the value that our stakeholders need. Unfortunately, internal audit at many if not most organizations does not have a lot of prestige and the argument should be about increasing rather than losing it.

 

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How to mess up your risk management program

Does your risk management activity ‘check the box’, or does it help the organization succeed by making more intelligent and informed decisions?

 

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How much cyber risk should an organization take?

I did a video with Joe McCafferty of MISTI last month. I am interested in whether you share my views. I also have some questions for you—after you watch the video.

 

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Top 10 most read Inside Internal Controls posts 2016 & Season’s Greetings

We are signing off with a list of the top 10 most read Inside Internal Controls posts 2016. Privacy issues and director’s liability seem to have been hot topics this year with several blog posts on the topics making it on the list. The top 10 most read Inside Internal Controls posts 2016 Director’s liability […]

 

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