A brief look at this week's news insights that impact internal auditors
February 10, 2017
How the internal audit function can take steps in addressing the talent gap tied to the department, artificial intelligence attempts to perform the auditor's job, and why managing one's individual brand is essential for internal auditors. This and more in this edition of This Week in Internal Audit.
Strategic Steps to Bridge the Internal Audit Talent Gap
As enterprise risks continue to grow increasingly complex across industries, skill sets must evolve within the internal audit function. By enhancing the department’s business acumen, internal auditors will further understand and develop successful strategies surrounding emerging risks. Bringing in new talent is an essential part of continually adding value to the function. There are key areas of focus in building for the future alongside human resources, some of which include mentoring and development programs, as well as leveraging technology to enable performance management.
Is Internal Audit Ready for the Emergence of AI?
As companies continue to embrace the onslaught of data-focused technology solutions intended to assist audit financial transactions, it may be too soon to rely on artificial intelligence to perform an auditor’s job. While technology has advanced significantly over time, working toward enabling AI to perform continuous auditing, there are aspects of analyzing the story behind the data that have yet to be reached. Technology may have the edge as far as collecting and processing data goes, but the aspect of human judgement gives internal auditors the edge. Ultimately, AI will be told what to do while auditors can provide the real value in communicating any patterns tied to anomalies found within the data.
Audit Uncovers $700k Fraud Scheme
An audit conducted by HB Nutkin Group, a family-owned real estate management and development firm, uncovered on a fraud scheme that resulted in more than $700,000 in theft. The company chairman’s assistant, Debra Biagi, would create fake invoices from fake suppliers and send checks from both the company and family members who trusted her to pay for services, according to the Washington Post. Biagi would then deposit the checks into her bank account. A total of $711,074.39 went missing from February 2014 to December 2015. After pleading guilty to one count of wire fraud, Biagi was sentenced to four years in jail.
IT Leaders and C-Level Execs Disagree on Cyber Defense Responsibilities
A new study conducted by security firm BAE Systems has shed light on a disconnect among corporate executives and the IT leaders in their organization. The BAE Systems sponsored report which surveyed 221 executives and 984 IT leaders, found that each group believes the other is ultimately responsible if a cyber attack would compromise the company’s critical assets. The study also revealed that the two groups are not on the same page as it relates to their estimates of what they believe a cyber attack would cost a company. While C-level executives estimated a $11.6 million hit, IT decision makers predicted $19.2 million.
Managing One's Individual Brand Essential for Internal Auditors
Internal auditors looking to achieve success for themselves and their team must work on their professional brand to translate it into a marketable career. Although not easy, by taking key steps to develop their personal brand, auditors can be consistent in practice and can be relied upon by management. Developing a branding guide that includes feedback from peers and employers, in addition to a information from a few select peers and co-workers, auditors can then create a matrix which documents how others recognize their brand today, and take steps in the direction of how they’re like to be perceived.
PCAOB Fines EY Indonesian Member Firm Over Audit Violations
The Public Company Accounting Oversight Board has fined an Ernst & Young Indonesian member firm $1 million for audit failure, noncooperation, and violations of the board’s quality controls standards. Two audit partners at KAP Purwantono, Suherman & Surja were penalized for their roles in a 2011 audit failure involving an Indonesian telecommunications company. In a statement issued by EY, the company acknowledged the violation of its own code of conduct. “We take our responsibilities very seriously and remain committed to delivering the highest quality work consistent with professional standards,” the statement read.