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A new vision for internal audit

Andrew D. Chambers (Cass Business School, City University, London, UK)
Marjan Odar (Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 5 January 2015

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Abstract

Purpose

The purpose of this paper is to explore how internal auditing may recover from being one of the corporate governance gatekeepers that failed to prevent the global financial crisis.

Design/methodology/approach

This paper draws on the theory of professions and provides a brief analysis of internal auditing history, ending with an appraisal of contemporary status.

Findings

Internal auditing has not been “fit for purpose” and can be enhanced. Low expectations of internal audit are currently addressed by enhanced guidelines from a number of parties. Internal audit needs to move firmly into the corporate governance space – to audit corporate governance more effectively and to provide more dependable assurance to boards.

Practical implications

The global Institute of Internal Auditors can use recent enhanced internal auditing guidelines as a springboard to regain their lead. Internal audit needs to cut the umbilical cord that ties it to management. The accepted “dual reporting” of internal audit is flawed.

Social implications

Society cedes professional status to an occupational group when it is in society’s best interests to do so. An attribute of a profession is its accent on serving the public interest. It is unsatisfactory that, five years after the global financial crisis broke, the international Standards for internal auditing still do not articulate the correct professional conduct on making external disclosures in the public interest when internal auditors are aware of serious wrongdoing not satisfactorily addressed internally.

Originality/value

This paper comprises a conceptual analysis to challenge the internal audit profession.

Keywords

Acknowledgements

An earlier working paper version of this paper was presented as the keynote address at the annual internal auditing conference of the Slovenski Inštitut Za Revizijo at Olimje Spa, Slovenia, November 2012.

Citation

Chambers, A.D. and Odar, M. (2015), "A new vision for internal audit", Managerial Auditing Journal, Vol. 30 No. 1, pp. 34-55. https://doi.org/10.1108/MAJ-08-2014-1073

Publisher

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Emerald Group Publishing Limited

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