Weekly Wrap – 6th February 2014

 

Hi I am Tom McLeod, Managing Consultant of McLeod Governance.

This is what I would be thinking about this week.

Defining Internal Audit

Last week, a client – a major multinational organisation – asked me to define internal audit.

Their Chief Financial Officer wanted to define internal audit as a means to restructure internal audit to add greater value to their organisation.

They asked me for the official definition of internal audit and to take things from there.

Institute of Internal Auditors Definition of Internal Auditing

Now I need to read for you the Institute of Internal Auditors’ definition of internal audit for this Weekly Wrap to make sense.

The Institute’s definition is as follows:

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

“That is the Problem with Internal Audit”

Now there are forty five words in that definition.

And for my client that was about forty words too many.

When I presented that definition to the client, the client said to me

That is the problem with internal audit.

A Better Definition

And it got me thinking – if we can’t define our purpose in less than forty five words how can we really articulate it to those who are ignorant to our existence or the value we might add.

Now there is nothing in the Institute of Internal Auditors definition that is wrong or inaccurate.

But we as a profession need to find a more succinct way of articulating that.

Equally we also need to consider how that would apply within our organisation.

For me, internal audit has always been about the application of common sense.

And perhaps that is the ultimate definition of it.

How McLeod Governance Can Help

We work with many clients defining what internal audit means for their organisations.

Call us for further information.

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