Is Internal Audit the Next Blackberry?

Abstract

Over the past decades there has been a series of major corporate governance crises. After each wave post-mortems were convened and efforts made by regulators to identify root causes. The good news—or bad, depending on your perspective—for the internal audit profession is that rarely were questions raised by those commissions and regulators about the role internal audit should have played to avoid the current crisis being reviewed.What the commissions did call for was a massive global focus on the need for boards of directors to better oversee risk in their organizations. As pressure on directors mounts globally to improve risk oversight, their dissatisfaction with traditional internal audit services is also growing. This article suggests the root cause of the mounting internal audit customer dissatisfaction globally is internal audit “paradigm paralysis”1—a strong attachment to traditional ways of doing internal audits that no longer meet the needs of key customers. Specific recommendations are made to help internal auditors transition past the paradigm paralysis and adopt new methods that better meet the needs of its key customers. *This article first appeared in ACCA UK’s Internal Audit e-bulletin.