The evolving role of internal auditors.

• Author: Marshall, Jeffrey
• Position: AUDITING

Internal auditors need more respect. So says Ray Broek, executive vice president of WithumSmith+Brown Global Assurance, a Princeton, N.J.-based accounting and auditing firm serving mid-sized companies in New Jersey and the Mid-Atlantic area. Broek, a former external audit partner with Ernst & Young, argues that there's a good case for expanding the role of internal audit to include functions like risk management.

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"The real value of internal audit is to go beyond financial reporting," Broek said in an interview. "You do need to understand the total risk environment. That's a key role of internal audit." Many of his firm's clients didn't feel risk management was a big concern, so "we've tried to bring a sense of process" to that effort.

Indeed, Broek says many of Withum's clients didn't even have an internal audit function and have looked to outside consultants for that, especially smaller public companies faced with Sarbanes-Oxley Section 404 internal control mandates. Others have hired internal auditors, one reason why the function has been expanding rapidly in recent years--though Broek says demand is high and "it can be...