Two recent government settlements with Albemarle Corporation (Albemarle), and Clear Channel Outdoor Holdings, Inc. (CCOH), describe, among other things, the efforts of the companies’ internal audit departments in identifying internal control “red flags” that unfortunately, to the detriment of the issuers, were not acted upon in a timely and adequate manner.
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As a former internal auditor, I appreciate the challenges that sometimes arise when findings of weak or missing internal controls are pointed out to the responsible management and will be elevated within the company. It is important that the internal audit function is appropriately empowered to present their findings without undue pressure and suppression by various levels of management. The smartest audit committee members and company senior management understand the importance of a strong internal control system including an effective internal audit function, and act accordingly.
Internal audit can serve as a valuable resource for the identification of important issues that companies need to address and remediate to avoid larger problems down the road.
Source: When Internal Audit talks, people listen…or at least they should. | Jim Barratt, LinkedIn
