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Internal auditors must speak out on governance
December 2017

ECIIA President Farid Aractingi tells the newspaper Les Echos-Cecile Desjardin that auditors must speak out on governance. Here is a translated transcript

What are the current challenges for the European Confederation of Institutes of Internal Auditing?

Working with others, internal auditors are important actors in a governance system that works towards creating sustainable performance. Governance is not an abstract principle dedicated only to ticking boxes in a regulatory framework. It requires a search for balance between the different actors of an organization. Those include the chairman, the CEO, and more generally between the board and the CEO. It also includes finding a balance between regulatory compliance and efficiency. This balance is guaranteed by the three main actors that build the governance system in an organisation: internal audit, risks management and internal controls. We serve the management but also inform them about any issues using our independent viewpoint.

At European level, it means that our profession must speak about corporate governance by, for example, participating on consultations on proposed European Directives, speaking during conferences, issuing discussion papers and guidance either produced solely by ECIIA or with our colleagues in other professional bodies – such as the Federation of European Risk Management Associations (FERMA).

Thanks to our oversight position over so many organisations’ operations, we can provide our unique perspective and recommendations to the European regulations on various issues, such as the management of personal data (GDPR), cybersecurity and audit reform.

How has internal audit evolved over the past few years?

Today, the profession is focused on five distinctive topics: independence, cross functionality, the discipline of execution, exercising pragmatic courage, and fulfilling our role as guardians of the temple of internal controls. Besides technical skills, soft skills are very important. Auditors must develop their capacity to manage contradictions. We must, at the same time; analyse and summarise, recommend control processes and innovate; understand deeply the business while retaining some “naiveté”; communicate verbally and on paper; and navigate between transparency and confidentiality.

All these changes have transformed internal auditors into a robust and well-equipped business partner, supported by both a panoramic 360° vision and a proven methodology, able to make a reliable, independent diagnosis about the issues of the organisation, and to be able to advise. To “win our seat at the table” means being heard by the board and the CEO. To achieve that we must always be more professional, a good communicator, flexible and reactive, with our global vision, searching for the best within all organisations.

Is the profession still attractive?

It depends from one country to the other. Today, more people want to become internal auditors in Athens or Istanbul than in Paris. Our ability to attract people into the profession is declining in Western Europe where internal audit departments have difficulties recruiting new people, although many young people are looking for a job. The profession requests discipline, rigour and a respect of methodologies. It requires flexibility, deadline management, as well as team work and stand-alone work. Maybe this is not in line with the expectations of new generations of workers.

Internal audit is very satisfactory intellectually, though. It is a training school in various domains where we can learn quickly as we change engagements every five to six weeks on average. The profession provides a good “social lift” for those passing through it, a period for developing discernment, and it is an extraordinary starting point to begin from in an organisation. After four years’ experience in internal audit, people can do anything and have a better idea of which area they want to work.

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