Companies Should Improve Internal Audit Policies

BY JIMMIE WAYNE KNOWLES

Companies Should Improve Internal Audit Policies
As a retired chief internal auditor for a Fortune 50 company, I could not agree more with the conclusions of the article “ A Changing Corporate Culture ” on the increased importance of the internal audit function in today’s environment. However, I believe the survey missed two important issues that limit internal audit’s effectiveness.

First, management needs to limit the extent to which internal audit is used for “special projects” simply because it has available resources. While these projects are important, they detract from the department’s ability to execute its audit plan.

Second, in many companies the internal audit management and much of its staff are ex-employees of the outside audit firm. Overreliance on such employees is a form of “incest” to a company—it hinders the independence of the internal audit function. Companies need to improve their policies in these two areas to have a truly effective internal audit function.

Jimmie Wayne Knowles, CPA
Spicewood, Texas

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100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.