I’m pleased to report that the past year has been marked by significant progress for the institute and the internal audit community against a backdrop of change. In the year that we reached our 70th anniversary, we continued to grow our membership above and beyond the 10,000 milestone. Meanwhile, global membership surged past 200,000. It is clear from this that demand for professional internal auditors continues to increase in the UK and internationally.
This is why, to support our growing membership more effectively, the institute has this year continued its planned investment programme in new talent, new technology and increased capacity.
Meanwhile, the corporate governance landscape continues to change rapidly. The catalyst for much of this change has been driven by major corporate collapses, in particular Carillion, but also BHS before it and of course, more recently, Patisserie Valerie. In response, policymakers have quite rightly demanded greater transparency and accountability from the business world. All of this has created challenges for the institute and the profession, but equally it has created the opportunity to enhance internal audit’s role as a cornerstone of good corporate governance. In recent months we have been doing all we can to harness that opportunity and influence the debate on the future of audit and corporate governance.
Indeed, the past 12 months have seen a flurry of independent reviews and inquiries, along with consultations by the government and regulators, in relation to audit and corporate governance reforms.
Most notably, the Independent Review of the Financial Reporting Council led by Sir John Kingman recommended abolishing the existing audit regulator and replacing it with the Audit, Reporting and Governance Authority, which chimed with what the institute had advocated for in our response to the review. In February we were delighted to host a high-level Leaders’ Forum lunch with Sir John Kingman for heads of audit and audit committee chairs at The Gherkin.
In all the reviews and consultations that we have responded to the institute has been a strong advocate for the role of internal audit in good corporate governance. We are delighted that a number of our ideas have been adopted by policymakers.
Furthermore, in addition to increasing our influence among policymakers, our policy and research programme has gone from strength to strength, providing guidance to professional internal auditors and helping to engage and inform our
In September 2018 we published the third edition of Risk in Focus, which was conducted with seven European institutes – France, Germany, Italy, the Netherlands, Spain and Sweden, as well as the UK and Ireland. For the first time, the report included a survey of chief internal auditors, which attracted over 300 responses and gave us a clearer picture of the critical risks facing organisations. Cyber security topped the poll, which is not surprising given the high-profile cyber attacks that continue to feature prominently in media headlines.
Hot on the heels of Risk in Focus, we published our well-received "Organisations’ Preparedness for Brexit" report in October. This was informed by a survey of 100 chief internal auditors working across the UK. The report looked at how internal audit can provide critical assistance in helping organisations to prepare for one of the most disruptive events in recent times.
In February, in partnership with the Institute of Directors, we published our good corporate governance guide for audit committees and directors, "Harnessing the Power of Internal Audit". One of the objectives of this new guide was to support us in delivering a step-change in our engagement with audit committee chairs and members. In further pursuit of this objective,
we held our inaugural President’s Dinner in December, the first in a series designed to engage the audit committee chairs of blue-chip companies.
Another area in which we have made significant progress in the past year has been in our development of an Internal Audit Code of Practice. This builds on our work developing a similar code for financial services that raised the status, standing and skills of internal audit in the sector. The development of the Internal Audit Code of Practice is being led by an independent steering committee chaired by Brendan Nelson, the audit committee chair of BP.
The levels of digital engagement from the internal audit community that we get through social media and our website continue to amaze me and the numbers speak for themselves. We now have over 9,000 followers on LinkedIn (and our following has increased by over 300 per cent in the past year alone), while the institute’s website now attracts over two million views per year, around a ten per cent increase.
The increase in the digital engagement of our members and the wider profession has been matched by an equally energetic drive to engage people offline. This includes the development of new networks and communities, such as our Audit Leaders community designed to support heads of internal audit and their teams, along with our successful Aspire network for internal auditors in the early stages of their careers. And last November over 460 internal auditors flocked to our annual conference at the QEII Conference Centre in London, making it our best-attended conference to date.
Arguably the most important thing the institute does to support internal auditors is to provide opportunities for professional development and accreditation. I’m therefore delighted that demand for our training and qualifications continues to increase. This year over 600 people participated in professional training courses (accounting for an awful lot of CPE points!). As we continue to encourage and support members to attain Chartered Internal Auditor status, it is encouraging that we currently have over 2,300 chartered members – and I want to see this number grow still more in the years ahead.
It is a positive sign that we enrolled 50 people to our two newly launched apprenticeship programmes. This is a great start, but we must now persuade even more people that internal audit is a dynamic and exciting profession for a career.
It has also been a record year for the institute in providing external quality assessments (EQAs). Not only have we completed 27 EQAs, but we have also published a vast array of technical guidance on subjects ranging from providing ethical assurance to boards and data protection to reporting gender pay gaps.
So, this year has been marked by many successes for the institute and for the internal audit community. The challenge for the future is to build on our success and to continue to grow and develop as a profession – and I believe we are well poised to do so.
Over the coming year we will engage members as we develop the Internal Audit Code of Practice. We will provide guidance, research and support as we assess the major risks facing organisations and conduct ongoing thought-leadership work such as Risk in Focus. We will continue to organise successful events across the UK and Ireland. We will grow our membership and provide opportunities for development and networking, and will continue to influence the debate about the future of audit and corporate governance.
Thanks to all of you for your amazing support over this past year. I look forward to working with you in the months ahead.
For further information, a copy of the institute’s Annual Report and Accounts for 2018/2019 will be available on the website in October as well as at our AGM, which takes place on Wednesday 16 October 2019.
This article was first published in September 2019.