I admit that I am biased. As one who spent the majority of my audit career in the public sector, I strongly believe that government internal auditors play an invaluable role in protecting our interests. That’s why recent news reports regarding government auditors have been so deeply troubling to me.

Over time, internal auditors tend to hear about a lot of things that went wrong. Unfortunately, it’s not just our clients who make mistakes — I have witnessed more than a few spectacular internal audit failures, and in too many cases the internal audits went wrong for reasons that easily could have been prevented during engagement planning. Some of the biggest blunders often seem to stem from the same few mistakes. In the hope that we can learn from each other’s mistakes, I have listed my take on the most common of these missteps. 

It’s that time of year again — the time of year when most of the important surveys about internal auditing seem to be published by way of white papers. Of course, I am particularly partial to the Pulse of the Profession (PDF) survey from The IIA’s Audit Executive Center, but several other new surveys also contain significant information for internal auditors. The only problem is that if you’re like most folks in internal auditing, there’s no way you can find time to read the results of every survey about the profession. To make life a little easier, I thought it would be helpful to summarize some of the key findings and common observations we’re seeing in the most recent round of surveys. If you have time to read all of the reports, great! Otherwise, here are just a few of the highlights from this year’s crop of thought leadership: 

As I have commented on numerous occasions, internal auditing can be a rewarding profession for those who enjoy making a difference in their organization. However, as with any profession, it is not without its challenges. New internal auditors often become frustrated when they are unable to generate an impact as quickly as they would like, or when things don’t go their way. During my career I have experienced the profession from numerous vantage points. As a young internal auditor directly out of college, I experienced the awe, excitement, and occasional frustrations that come with any new career. As I became more seasoned, the wide-eyed enthusiasm waned, but my passion for the work did not. Later, as a chief audit executive (CAE), I experienced new challenges, opportunities, and — yes — occasional frustrations. 

Recent media coverage has focused on prosecutors who are scrutinizing a draft internal audit report from a globally recognized company in an attempt to determine whether company executives ignored or tried to conceal the report’s findings from the audit committee. The draft report flagged concern about the company’s compliance with U.S. anti-bribery laws, and whether anyone attempted to bury or hide the draft audit report. If so, prosecutors believe it could help show intent — a key element in obtaining criminal charges.  

I recently had lunch with several of the chief audit executives (CAEs) who are members of The IIA’s Audit Executive Center. The conversation was enlightening, particularly when we talked about what differentiates an above-average internal audit function from one that is regarded as being truly world-class. 

In his iconic book Sawyer’s Internal Auditing: The Practice of Modern Internal Auditing, author Lawrence Sawyer observes that, “Few sources of friction within the auditing department exceed that caused by the process of report writing. The most brilliant of analyses and the most productive of audit findings seem to be forgotten during the trauma of report writing.” I have often thought that truer words have never been written. 

Like everyone else, I have been following the Olympus financial scandal with great interest. My ears perked up with the first mention in the Western media several weeks ago of potential involvement of the company’s “internal auditor.” However, I was quickly assured by internal audit colleagues in Japan that the individual mentioned was not actually the company’s internal auditor as we know the function in the West. 

This year, it’s going to be different. I’m not talking about the New Year’s resolutions of years past — the ones in which we promised solemnly that we would exercise every day and not only lose 10 pounds (or should it be 20?) but keep the excess pounds off forever. I’m sure that there are a few people who manage to keep resolutions like these. Good for you, whoever you are! But most of us just don’t need another set of unlikely resolutions that are doomed to be forgotten by February. 

It is hard to believe that another year is coming to a close and we are preparing to ring in 2012! I always find this time of year to be a great period for reflection, and I hope you will indulge me as I contemplate what 2011 has meant for The IIA.