This is the title of a recent article in the IIA’s Internal Auditor (Ia) magazine. (Membership is required to unlock the article.)
The authors are two lauded members of the profession that I have known for many years: Patricia Miller and Larry Rittenberg. Patti was a partner with Deloitte in my part of California and is a former chair of the IIA. Larry, a professor of accounting at the University of Wisconsin, has also been very active with the IIA; he is a former chair of COSO and chairs the audit committee of Woodward, Inc.
Any article by these individuals merits our attention, and they have a number of things to say with which I totally agree:
Internal audit is not the only profession that struggles with the value question. For example, in the medical field, value — or quality of care rendered — is certainly a goal. But quality of care is hard to objectively measure, so doctors often are evaluated by process measures, such as the number of patients treated in a day. Unfortunately, this may reduce the ability to achieve the value goal, as doctors motivated to see more patients may spend less time with each one, resulting in less ability to understand and deliver the quality of care required.
Similarly, CAEs who focus on process metrics such as completion of the approved audit plan may undermine…
