Internal Audit is undergoing fundamental and dramatic change.  Developments such as outsourcing challenge the basic rationale for having full time employees dedicated to internal auditing.  The continuing evolution of the definition of internal control has expanded far beyond accounting controls to a point where there is little difference between the terms "internal control" and "management."  And perhaps most important of all, internal auditors are continually challenged to prove that they are indeed providing "value" to today's lean (and sometimes mean) organizations. 

While some predict the end of internal auditing, others suggest these developments present a magnificent opportunity for internal audit to focus on what is  important to contemporary organizations, and revise age old audit goals and methodologies accordingly.   The challenge is to revitalize and recast internal audit.

The Institute of Internal Auditors has taken two giant leaps forward — by sponsoring the landmark "Competency Framework for Internal Auditing" research study and by changing the actual definition of internal audit itself.  The new definition reads:

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations.  It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

While some might contend that the Institute of Internal Auditors might have been better served by following the lead of The American Institute of Certified Public Accountants   when it announced a new range of "assurance services" — by announcing a new broadened array of "internal assurance services" — the new definition of internal audit does provide a vision for all internal auditors as they redefine themselves and their profession.

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Last modified: March 04, 2008