Two factors significantly undermine the role of internal auditors in the workplace – a perception of being corporate policemen, and a lack of understanding about their profession, often confused with that of external auditors. Clarification comes from Claudelle von Eck, CEO of the Institute of Internal Auditors South Africa (IIA SA), which is the professional home of internal auditors in South Africa and Namibia, but which also serves as administrator for IIA institutes in eSwatini and Lesotho.

‘While the base of methodologies is the same for both external and internal auditing, the scope of the two professions is vastly different,’ says Von Eck. ‘External audit is primarily a financial discipline, where the main mandate is to provide assurance that the financial statements of an organisation are a true reflection of its financial status; that the financial controls in place are adequate; and that the business is a going concern.

‘Internal audit is a multi-dimensional risk-based discipline to ultimately provide assurance that the organisation is adequately managing and addressing its risk across all operations, inclusive of strategy and governance, finance, HR and marketing, even the culture and external risks.’

The nature of this role and resulting reports that provide best practice advice have unfairly led to the labelling of internal auditors as corporate policemen. ‘People don’t like it when inefficiencies in their workplace are unearthed, and so internal audit reports are often approached with hostility,’ says Von Eck. ‘It also goes without saying that where there is fraud and corruption, internal auditors would be seen as enemies, as it is they who expose the culprits.’

In mature organisations, however, where the leadership has embraced good governance principles and understands the value and mandate of an internal audit, those who undertake the role are seen as agents of change, and this aligns well with the main objective of the IIA SA, namely ‘that internal auditors are indispensable as guardians of governance in both the public and private sectors’, according to Von Eck.

The organisation exists to protect the interests of the public by holding its current 8 000 members accountable, measured against the IIA SA’s code of ethics and international standards, of which it is the local custodian.

It is also a springboard for members to build their competencies through learnerships that lead to occupational qualifications or advances in their career through technical guidance, training, networking, mentoring and the supply of a comprehensive library of publications.

The training aspect is crucial, she says, because internal auditing is currently not a regulated profession, meaning that organisations employing non-members would have no recourse should those individuals not live up to the standards of the profession and the expectations of the organisations that employ them.

‘We’re therefore driving towards a reality where all practising internal auditors are held accountable under our auspices. Only in this way can we ensure they make a meaningful contribution to their organisations, which in turn results in having a positive impact on the economy.’

This is made more relevant given that the IIA SA plays a continental leadership role in addressing the intimidation that whistle-blowers face for exposing corruption in the workplace. It was instrumental in bringing about the Anti-Intimidation and Ethical Practices Forum to provide guidance on how to whistle-blow safely. Similarly, the IIA SA is a founder member of the Public Sector Audit Committee Forum, which facilitates guidance of, and assistance to, members of the public sector audit committees.

Von Eck confirms that, while time consuming, serving on advisory committees – global and local – is necessary to ensure the professional future of internal auditors, of which there is a shortage.

Addressing that means building on the learning programmes for new occupational qualifications, which the IIA SA does through its own academy, which is geared to train internal auditors on obtaining the internal audit occupational qualifications, as well as meeting their continuing professional development requirements.

‘We believe that such programmes will produce even stronger internal auditors. We have a vast array of constituencies whom we need to cater for, which is not an easy feat given that internal audit spans all industries, of all sizes, and individuals who range in levels of skills maturity.

‘We have continual strategic conversations at the institute and revisit our mandate constantly, which is to lead the evolution of the profession and its interests on behalf of stakeholders and society.’

In that vein, the IIA SA is about to release its 2018 Corporate Governance Index, considered an invaluable benchmarking tool for organisations to determine where they lie in terms of governance principles in relation to others in their industries.

‘It’s a strong mechanism for internal audit’s voice on the state of governance in South Africa,’ says Von Eck. ‘We hope it will inspire leaders to apply their minds to how they are implementing governance principles.’

By Kerry Dimmer