Letters

Internal Auditor, Feb, 2002

COMING OF AGE

I read Norman Marks' "The New Age of Internal Auditing" (Dec. 2001) with great interest. As always, Marks' message is clear and concise. I think this one in particular is occasionally communicated, but doesn't get through as much as is needed in this new era of internal auditing. "Go ahead, take some risks" is a message that we continue to communicate to our auditors, but "be creative" and "think outside the box" have, unfortunately, become cliches more than a way of doing business. However, the message sorely needs to be communicated -- often. Thank you for this article and the creative juices that start to flow as you read it.

JIM SEAMAN, CIA, CPA

Vice President Internal Audit Services and Corporate Compliance, Catholic Health East -- Mid-Atlantic jseaman@mercyhealth.org

Norman Marks' article raises important issues. However, I hold somewhat different opinions.

Marks' premise that auditors are, or are becoming, obsolete is challenging. As he states, businesses move faster today and have little or no room for error. Fast-paced environments often suffer from lax if not nonexistent controls and the obsolescence of auditors might be more due to their asking far too many questions than to any inherent failing of the profession.

The idea that auditors could have prevented Cisco's problems is doubtful. The past decade saw speculative financing of business plans including co-ownership through holding companies and all manner of creative financing with the resultant risks. Many have forgotten or never learned that speculation is an elegant word for gamble, and the stakes are often very high when gambling: A PIE of 50 and vendor financed sales should raise serious questions.

The internal audit reformation process proposed by the article involves envisioning, attitude, and rock stars. Auditors have limited exposure to the envisioning process unless they are involved in the business- or product-planning stages. Those processes are not usual audit processes, and active participation may adversely affect independence.

As for attitude: Do we really need more people with attitude? Professional pride would be far more constructive for the profession as well as audit clients.

I appreciate that high profile, exciting events and activities draw far more people than methodical, detailed, and thoughtful work. However, our cultural bias in favor of the "star" can and often does contribute to missed opportunities for significant accomplishments that have lasting benefits. I suggest that competent persons capable of delivering their message effectively would benefit the profession and the client without risking credibility and encouraging inappropriate attitudes often coupled with stardom.

The profession must address the important issues raised. Yes, auditors need to be proactive but methods that are more thoughtful currently exist. Control self-assessment comes to mind, even if the methods take more work and offer less glamour. I agree that auditors need to improve interpersonal skills and work to engender greater appreciation for the positive value of the audit process and products. However, I think that auditing in general and internal auditing specifically provides critical assurance of the right things being done the right way. However, we certainly need to become more effective at telling the audit story.

GARY WILK, CIA, CISA, MBA

Staff Auditor, U.S. federal government

MINDING THE DETAILS

I just finished reading "Fair Credit Reporting Act: Time to Mind the Details" (Dec. 2001). Overall, I thought it was informative and well written, but I would like to make one point.

The authors state, "The intent of the law is to provide individuals with time to correct inaccuracies in consumer reports before any adverse action." They go on to say that, in a typical situation, five days is an adequate amount of time, which leads me to believe that they have never had any dealings with a credit reporting agency.

Bylaw, the agency has up to 30 days to investigate a complaint of inaccuracies on a credit report. By the time the employee mails in the dispute form, waits for the reporting agency to investigate, and obtains resolution, the five-day window is long gone.

I would have recommended a 30-day window. However, I realize most businesses would not want to wait the 30 days the employee might need to correct any errors. This sounds like a Catch-22 for the employee!

JOHN PIERCE

Internal Auditor, Belo Internal Audit jpierce@belo.com

TURNOVER IN FRANCE

I was thrilled to read "Turnover: The Ebb and Flow" (Oct. 2001) and learn about this new trend in the United States, as it matches the French practice. I agree with every word Michael Barrier wrote.

In France, most audit departments are mainly flow-throughs, with a few career auditors. In most commercial firms, 80 percent of auditors stay two to four years, then move to other jobs in the company. In small firms, where promotions are scarce, and in the public/government sector, where they are slow, auditors tend to stay three to five years. This provides the benefits to the audit department you listed. But that is not the only reason, and probably not the major one.