Internal Audit is the Glue

Sitting in Orlando International airport waiting for my flight back home, I feel a need to put my reflections from the last few days to paper.  I was honoured to be asked to provide a keynote speech at the Institute of Internal Auditors International Conference 2013. This conference and its interaction with the global leaders in internal audit has been remarkable.

Firstly, the sheer scale and spectacle of the conference was something to behold. There were over 2,300 delegates in one room as I delivered my plenary keynote speech.  Standing in front of that many professionals with only yourself and your speaking points on an iPad mindmap is frightening and inspiring all at the same time!

Secondly, I had not fully appreciated the impact that the internal audit community is likely to play in our pathway to Integrated Reporting <IR>. The IIA have produced a publication entitled ‘Integrated Reporting and The Emerging Role of Internal Auditing’ which sets out the relationship between internal audit standards and our Framework, which is very much aligned.

IIRC Chairman, Mervyn King spoke at the 2007 IIA International Conference held in Amsterdam where he said, ‘in the next 5 years your profession will be revolutionised…a compliance based approach to internal auditing will be a thing of the past’. The profession has certainly made inroads towards his vision, and there are more changes to come towards the role being more strategic, and ultimately providing guidance to management on ways to protect and create value. It seems inevitable that internal audit will use the organization’s overarching business strategy to identify the risks that matter most and set the tone for the internal audit strategy.

This move to strategy is the fundamental link to <IR> as demonstrated by the close alignment of the IIA standards and our Framework, which can be easily understood by the table in the IIA publication.

As the IIA Paper states, “For Internal Audit, the question becomes not if <IR> will be adopted but what should the internal auditor’s role be in preparation during implementation, and through to maturity.” Or in the words of my Chairman, “IA is the glue”.

My lasting thought from the conference is the importance of the role that Internal Auditors in the <IR> journey. Something the IIRC and the IIA will work closely together on in the future.