“I don’t think there’s a company, a management, an audit committee that hasn’t gone back and re-looked at what they’re doing…..People are really scrutinizing and want to really make sure that their houses are in order and clean.” William Esrey former CEO Sprint
Sounds good, right? After the collapse of Enron and WorldCom, many CEO’s rushed to assure their shareholders and the public that they were doing everything they possibly could to tighten internal controls and run their companies with the highest integrity. But now that a few years have passed, have they really delivered on those promises?
One critical step for the achievement of these goals is developing and maintaining an effective internal audit function. A well run audit function can help companies to maintain, validate, and improve internal controls, to identify opportunities to reduce costs and improve processes and internal controls, and to strengthen corporate governance. I maintain that this is an area where many CEO’s still need to implement change at their company in order to deliver on what they say.
During the course of my professional activities, I find that many companies still have either a weak internal audit function, or worse, none at all. I would like to explore why this issue is so critical to business and how the necessary improvements may be made.