By John Seeram
As is customary each year, the Institute of Internal Auditors (IIA)–Global has set the month of May as International Internal Audit Awareness Month. Also, this year, 2021, the IIA is observing and celebrating its 80th year in existence.
With the profession now more valued and more recognized than ever, the occasion offers a wonderful opportunity to now proudly look back on the evolution of the IIA and internal auditing. It is time to also remember the aspirations of those pioneering founders who so steadfastly guided this profession throughout its infancy.
It was in September 1941 when two dozen Internal Audit thought leaders met at the Williams Club in New York City to begin what would become the IIA. It should be mentioned that in 1941, many countries were engulfed in war in Europe and in the Asia Pacific region. It was virtually impossible that the men who had formed the Institute then could imagine their brainchild and the profession it serves, and which would change in the ensuing eight decades.
The development of this profession required permanent Headquarters, and within a year its headquarters were acquired at 120 Liberty Street, New York, and this was a major achievement then.
Internal auditing wasn’t really a profession unto itself at that time; it was in most cases an offshoot or subdivision of an organisation’s accounting department. Internal Auditors spent more of their time ensuring compliance with accounting and operational procedures and verifying the accuracy of departmental calculations of transactions rather than looking at potential risk factors, as an example.
In the 1970s, internal auditing was still a document-heavy endeavour. Auditors then did their work using physical paper spreadsheets. Working papers would often be at least a foot thick if the audit was big enough. Drafts were still being written up in longhand and then forwarded to a Secretary for typing.
However, the technology that powers the profession was changing in the 70s but hadn’t yet led to the paperless offices, common in internal audit departments today. Indeed, it would be another 10 years or so before the Institute would refer to ‘the era of electronic data processing’.
Notable accomplishments in the 1970s worthy of mention for the IIA are
● The Headquarters were relocated from New York to Orlando, Florida in 1972, and a new building was acquired in 2001 in Altamonte Springs, Florida.
● In 1974, the first Certified Internal Auditor (CIA) Exam was held at 41 locations and taken by 654 candidates.
● Also in that year, the first IIA International Conference was held outside North America – in London, United Kingdom.
● In 1976, the IIA Research Foundation was established and became very vibrant and active.
● In 1978, the IIA issued its first set Of Standards for the Professional Practice of Internal Auditing.
● In 1979, National Institute Status was approved for the United Kingdom, France, Israel and Italy.
These specific events and accomplishments set the tone for the IIA attaining global status.
Outside of the 1970s and worthy of mention are
● In 1944, the IIA published its first issue of the Internal Auditor Journal. Today, this Bimonthly Journal contains high quality articles which are properly researched, and reference is made to best practice of internal auditing globally as they occur.
● In 1968, the Code of Ethics was approved as a Standard for every member of the IIA.
● This Code of Ethics is to promote an ethical culture in the global profession of internal auditing. It describes the minimum requirements for conduct, and behavioural expectations rather than specific activities.
● In 1999, the IIA released a New Definition of Internal Auditing, which states its fundamental purpose, nature and scope of internal auditors.
● In 2000, new IIA Standards for the Professional Practice of Internal Auditing were revised and approved. They are principle-focused, and provide a framework for performing and promoting internal auditing.
A major achievement of the IIA took place in 2009 when it published its International Professional Practices Framework (IPPF) This Framework contains
Mandatory Guidance
● Definition of Internal Auditing
● Code of Ethics
● International Standards
Strongly Recommended Guidance
● Position Papers
● Practice Advisories
● Practice Guides
The IPPF is intended to assist practitioners and stakeholders globally in being responsive to the expanding market for high quality internal auditing. It strengthens the position of the IIA as a standard-setting body for this profession globally.
That being said the major change in the internal audit profession from its inception in 1941 has been the role internal auditors are playing today in their organisations. In essence, it is now a managerial approach. It is not about just checking internal controls. There is a new mindset of what the internal auditor’s function is, and what he or she can best contribute to their organisations.
The Institute must be credited with providing ethical leadership in turning internal auditing into a real profession. To the auditors, be a player and do it well. Do not just be ‘best’ or ‘excellent’, be ‘outstanding’. Be recognised by your management and peers as leading in the development of professional internal audit services. There is that word again – ‘professional’ – a word that didn’t always apply to internal auditing.
The IIA in year 2021 after eight decades is to be seen by its members as operating as one global organization, including not only the global IIA, but also all Chapters and Institute all over the world.
One major challenge in the coming years is to make sure that internal auditing is valued globally, and is recognised as a profession worldwide. The Institute is an organisation focused on progress, yes, but specifically on ‘Progress Through Sharing’ – sharing with others your knowledge, best practices, and passion for the internal audit profession.
In closing, after 80 years of existence, the IIA has accomplished its recognition as the global voice and advocate of this profession. As for the Guyana Chapter, it has been/is benefitting immensely from the guidance of the IIA. Let’s all be proud of the remarkable progress made over its 80 years of existence in the development and practice of this profession, and to successfully continue along this treaded path in the forthcoming years.