MOST finance firms now have an internal auditor on their executive boards, signalling the respect with which they are held, according to a study by the Institute of Internal Auditors (IIA) out today.
Before the financial crisis, auditors had sometimes been seen as spies, according to the IIA’s chief executive Ian Peters.
The study shows 56 per cent of finance firms’ executive committees now include internal audit, up from 45 per cent a year ago.
But there are still problems for the sector, as auditors who are supposed to be relatively independent from their firms can end up in difficult situations when they could be put under pressure by executives.
The study found 40 per cent of audit bosses at finance firms felt they could not go to meet their regulator in private, without executives present.
And 10 per cent of auditors are engaged in implementing risk- management systems, which risks creating conflicts of interest. The auditors should be checking the policies are themselves well implemented and managed.
“If you’re not in the room when the discussions are taking place, how do you know where the risks, issues and concerns are?” said Peters.
“This is not spying on people, it is about having open access to do the job properly.”