What we do best.

Author:Rodgers, Peter M.
Position:In My Opinion - Column

AN INHERENT CONFLICT OF INTEREST EXISTS BETWEEN INTERNAL auditing's mission to provide assurance and the goals of consultancy. Although limited advisory work such as committee participation or risk-management consulting represent a vital part of internal auditing's work, significant implementation or training engagements are cause for concern. When the value added from this type of consultancy begins to supplant our core value -- assurance -- we find ourselves on the proverbial slippery slope. If auditors have learned anything from Enron, our profession's No. 1 cautionary tale, it is that all of our worth flows from our integrity and independence. When those two pillars are compromised, internal auditing loses its reason for existence and disappears faster than one can say, "Arthur Andersen." At the risk of sounding like a moss-backed, reactionary throwback, I believe that internal auditors should not be consultants.

One of our most fundamental control techniques is the segregation of duties, and this essential control is lost with audit consulting. In most organizations, the vast majority of consultancy dollars and hours are expended on supplementing the roles of management; for instance, designing and rolling out new information systems, establishing call centers, or right-sizing an operation. In other words, consulting services, by nature, represent the work of management. By serving as an extension of management, internal auditing compromises the vital separation that is supposed to exist between itself and the client.

An essential and delicate balance exists between the roles of auditing and management. Auditors are constantly urging the deployment of...

To continue reading