Internal auditors are getting bullied and sanctioned when they present uncomfortable findings to management and the recent Star Casino money launderingcase is just one example, according to a survey by the Australian chapter of the Institute of Internal Auditors.
One in seven internal auditors – 14 per cent – said they had been sanctioned for an unfavorable report with reactions ranging from bullying by peers to denial of promotion to dismissal.
The IIA Australia survey, conducted at its recent conference, also revealed 83 per cent of respondents said their job had become more difficult in the past two years and 45 per cent had made findings that were not acted upon in a timely manner.
According to some reports, executives at Star Casino “went berserk,” after an internal audit report pointed out deficiencies in the company’s anti-money laundering efforts and tried to apply direct pressure on two KPMG partners.
“We’ve always known that internal auditors can be under pressure, can be under duress,” said Peter Jones, chief executive of IIA Australia. But, he added, the inaugural IIA research had been “unsettling” in uncovering that one in seven internal auditors had been subjected to pressure in the past. “If members have been pressured in this way, and it’s fairly black and white what’s occurred, then we will call it out.”
I was dismissed from a Fortune 250 retailer without a proper audience with the audit committee or CEO. The CAE role lacks the options and the protections offered by the SEC and the PCAOB. This results in conscious professionals being heroic and unemployed or silently co-signing of uncomfortable practices to remain employed..
I’ve presented findings that I thought would be the end of my employment. The owners looked at the evidence and acted to change thinking at the top.
As a professional Internal Auditor, I couldn’t hide my findings, just to keep my job.
This is an interesting article!
We as Internal Auditors and Auditors in general can find themselves in a difficult position when it is time to submit audit findings.
It is so important to have the support of the Audit Committee/Board, Management and Local Regulation to support our role.
It is also important for Internal Auditors to be properly trained and learn how to think critically while executing sound judgement.
I am now retired but in my 40 plus year career in internal audit, pushback by executive management was an issue that, while not frequent, was fraught with danger, both personal (will I be fired for this?) and organizational (ignoring the audit could have significant detrimental effects on the organization). I would advise auditors to hone their diplomatic skills, have well vetted factual information in their reports, communicate throughout the audit (don’t just drop some bombs at the end), and be 100% ethical and truthful. In a nutshell, have your ducks in a row and develop strong communications skills. Come across as self-confident, but not arrogant. Respect the person you are dealing with, but do not compromise your ethics. Understanding differences in the conclusions and opinions derived from the facts developed is fine (indeed absolutely necessary), but agreement on the facts is essential.
Thanks for this article. My internal audit career of 14years has been full of conflict with management, other board committees and staff in the three organizations I have practiced internal audit. A colleague and a friend who was an Internal Audit manager of a financial institution in my country was murdered after he refused to back down on a dossier that would see the institution being place under supervision of Central Bank. There active and passive threat to audit staff more so where laws, rules and regulations governing internal audit practice are weak or inexistence.
I am currently an Internal Auditor at a Local Municipality in South Africa. The Accounting officer(AO) is passively bullying our Unit by 1. Not signing Claims of Audit Committee 2. Not authorizing training & workshop for our Unit. 3 Indicating to staff members that we are investigating political heads of the institution, while we are simply conducting our duty 4. The AO tells politicians to deals with us. On our first meeting with the AO, he indicated his desire to suspend the CAE. He also called and told one of the auditor that ” you will not succeed in investigating the political head, instead you will burn”. The accounting officer also instructs other departments to not give us information/data when we have issued a request. It is very frustrating to conduct an audit since there are red-tape everywhere in the Municipality. Audit Committee has tooth since it reports to Council by Councilors are ” just” politicians in South Africa, who lacks proper consultations