7 Deadly Internal Audit Sins

Summary

Richard Chambers, president and CEO of The Institute of Internal Auditors, outlines seven critical 'internal audit sins' that can severely damage an auditor's career. These include publishing erroneous reports, submitting false work papers, losing temper with clients, auditing with a personal agenda, betraying confidentiality, violating company policies, and issuing unhelpful reports. Chambers stresses the importance of maintaining professionalism, ethics, and objectivity, highlighting how even one mistake can tarnish a career. He encourages internal auditors to focus on strategies that elevate their careers while avoiding these detrimental pitfalls.

Takeaways

• 😀 Publishing an erroneous report can permanently damage your career and reputation, with retracted reports serving as a constant reminder of failure.
• 😀 Submitting incomplete or false work papers is unethical and will bring intense scrutiny to all of your work.
• 😀 Losing your temper with a client is unprofessional and will leave a lasting negative impression on your career.
• 😀 Always take the time to carefully consider your responses to clients, especially when responding to emotionally charged emails.
• 😀 Auditing with a conflict of interest or an agenda will destroy your reputation as a fair and unbiased professional.
• 😀 Breaching confidentiality by sharing sensitive information undermines trust and destroys relationships with clients and management.
• 😀 Violating company policies creates a double standard and can damage your credibility with clients and the organization.
• 😀 Internal auditors should never act as though the company's policies don't apply to them, even if there are rare exceptions.
• 😀 Issuing petty or unimportant audit reports fails to add value and can be poorly received by management.
• 😀 Internal auditing is about helping management achieve objectives, not just pointing out what's wrong.
• 😀 Avoid reperforming the same audits year after year without adding new insights or value to the process.

Q & A

What is the primary focus of Richard Chambers' blogs?

Richard Chambers' blogs primarily focus on strategies and practices that internal auditors can deploy to generate value and succeed as professionals.

Why is it important to address potential pitfalls in internal auditing?

Addressing potential pitfalls is crucial because the most carefully planned internal audit careers can be derailed by serious mistakes, which can have long-lasting consequences for the auditor's career.

What is the first 'internal audit sin' mentioned by Richard Chambers?

The first 'internal audit sin' is publishing an erroneous report, whether the error is big or small. Such a mistake can have long-lasting repercussions, including damage to the auditor's reputation.

Why is an erroneous internal audit report so damaging?

An erroneous internal audit report is damaging because it can be hard to forget, and once retracted or amended, it serves as a reminder of failure, creating doubts about the auditor's competence and reliability.

What are the consequences of submitting incomplete or false work papers?

Submitting incomplete or false work papers is unethical and can lead to scrutiny of all the auditor's work. It compromises the integrity of the internal audit process and can result in serious professional consequences.

Why is it important for internal auditors to maintain professionalism when interacting with clients?

Maintaining professionalism is important because losing temper or acting unprofessionally can leave a lasting negative impression on clients, damaging the relationship and the auditor's reputation.

What advice does Richard Chambers give when responding to an emotional or angry email from a client?

Richard Chambers advises taking time to reflect before responding to an emotional or angry email. It's important to think carefully about the response and possibly consult with a boss before sending it.

What is the danger of auditing with an agenda or a conflict of interest?

Auditing with an agenda or a conflict of interest is a severe ethical breach. It destroys the auditor's reputation for fairness and impartiality, and even the appearance of a conflict can have damaging consequences.

What does Richard Chambers say about confidentiality in internal auditing?

Richard Chambers stresses that betraying confidentiality by passing along client information inappropriately is a serious ethical violation that destroys trust and damages the relationship between the auditor and the client.

What is the impact of violating company policies as an internal auditor?

Violating company policies, such as using non-approved services or indulging in extravagant practices like flying first class, undermines the auditor's credibility and the integrity of their recommendations. It damages the trust between the auditor and the client.

Why is issuing an internal audit report that lacks value a critical error?

Issuing an internal audit report that lacks value or focuses on trivial details is counterproductive. It wastes time and does not contribute to achieving the management's objectives, which ultimately reflects poorly on the auditor's effectiveness.

What is the overall message Richard Chambers aims to convey to internal auditors?

Richard Chambers urges internal auditors to focus on avoiding these 'sins' that can derail their careers, and instead, concentrate on strategies that allow their careers to thrive, elevating their professional effectiveness from ordinary to extraordinary.