Five Reasons that Explain Why Internal Audit Matters

People choose a line of work for a variety of reasons.  Sometimes it is because it pays very well, or it is what our parents steered us towards. It could be because it is the only job in town or because it is glamorous. Regardless of the circumstances and career path that brought you to internal audit, an important question begging for an answer is: Why do you stay?

Here are the five reasons I find most compelling to remain an internal auditor.

1. We Advocate for the Organization’s Stakeholders. Stakeholders are those that impact or are impacted by the organization. It includes shareholders who invest their capital in the organization and expect a return.  It includes employees and their families, whose livelihood depends on a recurring paycheck to pay bills, put children through school and hopefully afford an occasional vacation and a reasonable retirement. 
   
   The local communities that provide the roads, water, sewer, utilities and an educated workforce would like to see a vibrant business environment composed of healthy and responsible organizations creating jobs for their citizens. Taxing authorities want organizations to pay their taxes as required, vendors want to be paid timely and accurately for what they sell, and customers want to be dealt with fairly by the companies selling goods and services. Taxpayers want their government agencies and donors want the non-profit agencies they support with their contributions to provide the best value for money.
   
   Every one of these stakeholders depends on auditors and compliance professionals to verify that organizations will maximize the utility expected of them without waste, inefficiency or fraud.
   
   
2. We Support the Achievement of Objectives. Organizations, whether for or non-profit, exist for a reason.  There is a mission and objective that determine the organization’s purpose in the short and long terms. Standard 1220.A3 states that internal auditors must be alert to the significant risks that might affect objectives, operations, or resources. It states further that “the internal audit activity adds value to the organization and its stakeholders when it considers strategies, objectives, and risks.”
   
   Internal audit and compliance professionals must assess conditions to determine if “Organizational objectives support and align with the organization’s mission” (Standard 2120).
   
   So, we help boards and management teams ensure these objectives are being pursued diligently, consistently and honestly. Our collective efforts help organizations achieve their goals and their mission.
   
   
3. We Reduce Fraud and Institutional Corruption. Transparency International (TI) publishes its annual Corruption Perceptions Index (CPI) and Trace International publishes the Bribery Risk Matrix. These studies and corresponding reports show consistently that economies around the world suffer from unacceptable levels of fraud and corruption. These anomalies decrease economic growth by diverting limited funds away from their intended and needed purpose (e.g. build schools, factories, hospitals, roads, airports) and into the bank accounts and other personal assets of corrupt government and private-sector individuals. Instead of applying all allocated funds to building the needed infrastructure or continuing normal business dealings, funds are diverted creating a tax on entire countries.
   
   Standard 1210.A2 states that “internal auditors must have sufficient knowledge to evaluate the risk of fraud and the manner in which it is managed by the organization”. Standard 2110.A1 states that the internal audit activity “must evaluate the design, implementation, and effectiveness of the organization’s ethics-related objectives, programs, and activities.” 
   
   Our work at the organizational level, when aggregated at the macro level, helps to reduce the incidence of institutional fraud and corruption overall. As serious as these problems are presently, conditions would be much worse without us. 
   
   
4. We Help Create Jobs. One of the most valuable things anyone can get is a job. Well-run and successful organizations are profitable, they grow and as they expand, they create additional employment that provide a livelihood for individuals and secure the future of these workers and their dependents.
   
   Our goal is to help management and boards build and run successful organizations, so by extension, we are helping to create employment opportunities. Our collective efforts give people a workplace to go to every day, feeding dreams and hopes for the future that in turn reduce crime and dysfunctional social dynamics. 
   
   Our work helps to protect and enhance organizational value, minimize downside surprises and increase the likelihood that organizational initiatives will result in stronger, healthier and more vibrant economies.  
   
   
5. We are Curious. I’ve come to believe that one of the most important traits of successful auditors is that they are curious. They want to know how organizations work and why things happen. They want to find the source of issues so they can be instrumental in helping them get resolved. They want to research, explain, and see issues resolved. They are results oriented and diligently check to make sure that reportable conditions get the proper attention and get remediated.  But it all starts because they are curious. 
   
   There are very few jobs besides internal audit that provides this much insight into the gears that keep the machine, called an organization, working. 

While everyone has a different reason for choosing a job in internal audit, there are multiple explanations for remaining an auditor. While the work and the reaction from our customers can be frustrating at times, it is also very rewarding in the short and long term. It is important to reflect on this because we should have a sense of mission about our work. By asking ourselves periodically “why do we audit?” we will remind ourselves that we are making a positive contribution to our organizations and our communities while working in an exciting profession.

Photo by Jessica Sysengrath on Unsplash