How do you measure the effectiveness of internal audit?

I want to thank Dr. Rainer Lenz for telling me about the new paper he and Dr. Marc Eulerich have written for the IIA’s Internal Audit Foundation. (I also want to commend the Foundation and the IIA Dallas Chapter, the sponsor, for their innovative crowd-funding of the paper.) Rainer and I have exchanged thoughts and ideas about internal audit for years, and I respect him and his contributions to the profession.

The products of the Foundation are intended as leading research. They do not represent guidance.

Defining, Measuring, and Communicating the Value of Internal Audit: Best Practices for the Profession has some excellent content, especially the quotes from CAEs. I will focus on those before explaining why I think it falls short.

• Internal auditors and internal audit functions have been struggling — some more than others — to find convincing answers addressing one fundamental question: What is the added value of internal auditing in the specific organizational context?
• Internal audit’s perceived value and its standing in the profession itself and among its stakeholders is still often described as hazy and enigmatic.
• Deloitte (2018) finds that only about 40…