President's report
By Paul Manning CMIIA QIAL CIA
Our vision and strategy see the Chartered Institute as a powerful voice for our profession, promoting the vital role that internal auditors play in organisations across all industries and sectors, as well as supporting the development of the profession in the UK and Ireland and helping further elevate its status as essential to good corporate governance.
I am pleased to report that the Institute and the internal auditing profession continue to go from strength to strength. We proudly boast a membership of more than 10,000 across the UK and Ireland, making us the second largest national institute of internal auditors behind only North America within a global body which this year passed 200,000 members. Consistent membership growth over recent years demonstrates both the increasing demand for professional internal auditors and the value being placed on internal auditing in a fast-moving and increasingly uncertain business environment.
The increase in our membership is matched by our unparalleled drive to maximise the Institute’s impact for our members and for the wider profession, including the development of new networks and communities such as the successful Aspire network for auditors in the early stages of their career and the recently-launched Women in Internal Audit.
This year also saw us release a series of landmark publications, providing guidance and support to professional internal auditors and reaching out to our key stakeholders. They included our most important thought-leadership project, ‘Risk in Focus 2019’: this is a collaborative effort with seven other European institutes of internal auditors, based on a survey of over 300 chief audit executives, and exploring trends in the critical risks facing organisations. Our timely report ‘Organisations’ Preparedness for Brexit’ looked at how internal audit can help businesses and other bodies get ready for what could be one of the most disruptive events of recent times. And in collaboration with the Institute of Directors, we were delighted to launch ‘Harnessing the Power of Internal Audit’ which provides welcome guidance on good corporate governance for audit committees and directors.
The financial position of the Institute at the end of this year reflects our ongoing investment in new talent, new technology and new systems as part of our five-year strategic plan. That investment is helping us develop and promote the internal auditing profession of the future, and we continue to hold significant cash reserves to enable us to do so.
Following the collapse of Carillion in February 2018, the last 12 months saw growing calls for reform of the UK’s corporate governance framework. The Independent Review of the Financial Reporting Council led by Sir John Kingman recommended the replacement of the audit regulator with a new Audit, Reporting and Governance Authority, and in February we were delighted to host a lunch for Sir John with audit committee chairs and heads of audit of some of the largest companies. The BEIS Committee’s Future of Audit Inquiry followed, as well as more recently the Independent Review into the Quality and Effectiveness of Audit being led by Sir Donald Brydon. In our responses to all these inquiries and reviews, the Institute has been both a strong advocate for the role that internal audit can play and a voice for essential reforms, and we are delighted that a number of the ideas which we put forward have been adopted by policy-makers.
The ongoing debate on the future of corporate governance and auditing certainly creates challenges for our profession. But it also creates opportunities to enhance internal audit’s role as a cornerstone of good corporate governance. With expectations of internal audit rising, we have established an independent Steering Committee led by Brendan Nelson, the audit committee chair of BP, to develop a new Internal Audit Code of Practice. This will help us to raise the bar right across the profession and builds on the Institute’s earlier work creating a similar code for financial services organisations. We have been actively promoting our work on the new Code of Practice, and I urge you to engage in our consultation.
The achievements highlighted in this report provide just a snapshot of the Institute’s successes over the past year. We will continue to build on these successes during 2019/20, ensuring that we remain resolutely focused on delivering the vision and strategy we set out in our five-year plan, ensuring the Institute is a champion for our profession and for all our members. I would like to end my report by thanking all the wonderful staff at the Institute who do such a terrific job, our many volunteers, my colleagues on Council, and all our marvellous members. It has been my privilege and honour to serve as your President whilst the Institute in the UK and Ireland celebrated its 70th anniversary, and as we raise a glass to many successful years ahead!
