IN MY OPINION GIANNI GROSSI, CIA, CCSA, CGAP, CFE
MDo We Really Need Heroes?
ANY INTERNAL AUDITORS HAVE LABELED THOSE WHO BLEW
the whistle at WorldCom as “heroes.” Although I admire the whistleblowers’ courage and feel sympathy for the troubles they have endured,
I disagree with this characterization. Blowing the whistle is not a
desirable solution, nor a behavior that auditors should necessarily
praise or aspire toward. Instead, the WorldCom incident points to a failure
on the part of internal auditing and the need for members of the profession to
reexamine their role in the organization.
Blowing the whistle is an act of desperation, not a desirable business strategy.
It represents choosing one catastrophe — speaking out and causing loss of employee
jobs and shareholders’ painfully accumulated savings — over another — saying
nothing and causing the organization to fall into moral ruin. When one is in a
lose-lose situation, the fight has already been lost, and the onset of final disaster
is only a matter of time. For an internal auditor, allowing the company to reach
this point is far from heroic behavior.
Avoiding the lose-lose scenario requires auditors to help their organizations
develop a culture that discourages unethical behavior and triggers the appropriate
safeguards well before whistleblowing becomes an option. In this sense, one could
argue that WorldCom’s internal audit function may have missed its first and
most basic mission: prevention. Although internal auditing may have had less
responsibility than other oversight entities involved at the firm, it was nonetheless one of the components of a system that undoubtedly failed.
The lesson is clear: What matters is not after-the-fact auditing of problems
that have already occurred and that — if serious enough — cannot be remedied. Instead, the audit profession needs to play a strong, proactive role in the
organization. Auditors must help establish an effective governance system,
not just a series of empty boardroom rituals, and ensure the organization maintains a healthy ethical climate that acts as a barrier against management misbehavior. The audit function’s influence must extend to the very essence of
the company’s way of behaving, and our repertoire of skills needs to go beyond
traditional audit competencies such as statistical sampling or analytical testing. Today’s organization needs auditors with courage, personality, conviction, and assertiveness — something much different than the species of
“bureausaurs” we sometimes encounter in our community.
I once heard a local politician say that a country that needs heroes is indeed
a country in trouble. The same concept can be applied to our profession: If internal auditing needs heroes to survive, then something is amiss. Instead of praising a last-ditch effort at an organization that failed its stakeholders, we should
shift our focus toward the shortcomings of our profession and the measures needed
to correct them. In the modern organization, one of internal auditing’s key objectives should be to help ensure the work of a hero is never needed.
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The opinions expressed are solely those of the author.
INTERNAL AUDITOR FEBRUARY 2004