How do you know if the audit firm is providing value with a quality audit?

By Joseph McCafferty 
January 21, 2016

How can we tell if the external auditors are doing a good job? Often we can’t. Lots of companies have had large accounting and fraud issues blow up shortly after the external auditors issued a clean audit opinion.

Yet the question remains for the audit committee: How do we know the audit firm is providing value with a quality audit? This is a question that the Center for Audit Quality (CAQ) has worked to shed light on for years. 

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What the SEC's first outsider whistleblower award means for internal audit

By Joseph McCafferty 
January 20, 2016

Last Friday, the Securities and Exchange Commission’s whistleblower office announced an important first: It revealed the only award to date for aiding in the prosecution of securities fraud paid to an individual who had never worked at the company in question.

It's an important development. Until now, all of the SEC's whistleblower awards have been paid to individuals who were working for the company at some point before they tipped off the agency about potential frauds at their employers.

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Having trouble finding talented individuals to fill internal audit roles? Maybe you’re looking in the wrong places.

By Joseph McCafferty 
January 15, 2016

Several studies have pointed recently to a shortage of skilled internal auditors. Some commentators have even referred to the difficulty organizations are having filling job openings and the competition for capable internal auditors as a “war for talent.”

Hyperbole aside, they aren’t much off the mark. A survey of 444 chief audit executives published last year by The Institute of Internal Auditors (IIA) found that companies are having trouble filling internal audit job openings. More than half of the respondents (54 percent) cited increased competition for a limited pool of candidates as a major concern.

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Can you be sure that your suppliers are on the up and up? Sounds like a job for internal audit.

By Joseph McCafferty 
January 13, 2016

It’s every company’s worst nightmare: A call comes in to corporate communications from a reporter from 60 Minutes looking for a comment for a damaging piece they are airing in few weeks.

That’s exactly what happened to flooring retailer Lumber Liquidators last year. The show ended up running a segment about how the company was selling potentially unsafe laminated flooring in the United States that it sourced from a supplier in China. 60 Minutes, acting on a tip from a short seller, claimed the flooring contained dangerous levels of toxic formaldehyde, a chemical that is known to cause cancer.

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By Joseph McCafferty 
January 12, 2016

It’s no secret that internal audit is being pulled in several different directions these days and that the demands on the function are greater than they have ever been. A partial solution to the mounting workload has been available for years now, but audit shops have been slow to embrace it. Is it time to give automation and advanced data analysis a closer look? 

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By Joseph McCafferty 
January 11, 2016

You’ve heard the jokes, I’m sure: “How do you tell an extroverted accountant? He’s the one that looks at your shoes when he’s talking to you.”

The idea that accountants and, by association, auditors are introverts is, of course, a long-standing trope born in the days of the back-office bean counter. It’s a misnomer that’s been difficult to shake, even as internal auditors have risen in importance and influence in most organizations, and companies have staffed audit departments with well-rounded, dynamic professionals.

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