Internal Auditing

Paper Summary:

In this article the writer notes that over the past two decades, a number of changes took place that greatly altered the business world. The writer points out that some of these changes were external, such as ever-increasing globalization, growing competition and fast-paced technological innovations. However, some of the changes were internal. The writer relates that at the beginning of the millennium, for example, huge cases of company fraud rocked the structures of many organizations and that, as a result, the entire auditing field was put on trial. The writer maintains that Enron and similar financial disasters made many companies think and then think again about how to enhance their own internal audit functions. In order to find out more about auditing in present times, the writer interviewed, Robert Norwick, the internal auditor of a local mid-sized family-owned business.

Outline:
Background
Internal Audit Position
Need for Internal Auditors
Future Growth
Average Current Compensation of Internal Auditors
Certification
Organizations/Resources

From the Paper:

"Norwick works for a farsighted company that recognizes the value of prevention. They also realized that if they ever wanted to go public or acquired a public company, they would be accountable by legislation. Instead of using external auditors, they decided to expand their internal department. It hired him a couple of years ago after an extensive search to find the right individual for the new internal audit position. They put together a cross-functional search committee, including the human resources director and CFO, to get varied input. They also looked at additional skills beyond the traditional ones normally required for internal auditors. For example, they wanted someone who was just as comfortable in front of the desk talking with people as well as behind the desk crunching numbers."

Sample of Sources Used:

• Dalton, Dan and Dalton, Catherine. "Sarbanes-Oxley legislation and the private company: if not a marriage, then certainly an engagement" The Journal of Business Strategy. 2005. 26.2 (2005), 7-9.
• Harrington, Cynthia. "Internal Audit's New Role." Journal of Accountancy. 198.3 (2004), 65-71
• Institute of Internal Auditors. Internal Auditors Certification. 8/9/06. http://www.theiia.org/.
• Pricewaterhouse. "2006 State of the internal audit profession study: Continuous auditing gains momentum." 8/10/06 http://www.pwc.com/extweb/pwcpublications.nsf/docid/1981a92e13dee3cf85257 18b006de802
• Smith, Gene. "Communications skills are critical for internal auditors. Managerial Auditing Journal. 20. 5 (2005), 513-520.

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