New Strategies and Best Practice in Internal Audit

NEW STRATEGIES AND BESTPRACTICES IN INTERNAL AUDITAn emerging model for building organisational valuefocusing on riskMANAGEMENT ASSURANCE SERVICES“Thetruth is,‘audit gets norespect.’ Quitefrankly, if the auditdepartment in question isusing yesterday’s approach intoday’s company, has not maneu-vered top management and the boardinto focusing on the company’s top five orten risks, has not caused management toquantify these risks, and has not succeeded indeveloping authorised bounds of risk tolerance, then1it doesn’t deserve any respect.” Larry Small, President, Fannie MaeTABLE OF CONTENTS2 Introduction5 The Existing Model8 Bridging the “Expectation Gap”: A New Vision13 The Emerging Model16 Implications and Opportunities18 Conclusion20 Appendix I: Interview: The Future of Internal Audit 22 Appendix II: Microsoft’s “New Wave” in Risk Management23 EndnotesProduced as part of a series by KPMG’s Assurance & Advisory Services Center.1AN EMERGING MODELI NTRODUCTIONnternal audit has long been a function ofImany of the world’s most progressive organisations. Originally developed as a way toassist organisations with safeguarding corporate assets and enforcing corporate policies,internal audit has traditionally occupied a secure spot in modern corporations, with oneof its primary focuses on monitoring compliance with policies and controls. This mode ofoperation has resulted in a function and a profession that have historically been ...