BOOK REVIEW - David J. O'Regan 2024

Routledge: https://www.routledge.com/The-Closing-of-the-Auditors-Mind-How-to-Reverse-the-Erosion-of-Virtue-Trust-and-Wisdom-in-Modern-Auditing/JORegan/p/book/9781032664873

Info: David J. O'Regan web site ( davidoregan.com )

“The Closing of the Auditor’s Mind? How to Reverse the Erosion of Trust, Virtue, and Wisdom in Modern Auditing” (2024) by David J. O'Regan, LittD - with a foreword from Professor Mike Power - is a goldmine for all professional peers in the governance and audit arena caring about the betterment of internal auditing on a macro- and micro level, as a profession and as practitioners. As disclaimer, I can only touch upon a few gold nuggets in this brief book review, after reading across the submitted manuscript twice. It is a comprehensive read benefitting from the author’s rich intellectual capital.

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This is not a “How to” book in the classical sense, ready to use, hands-on, practical guidance. No need to be disappointed. On the contrary, this book goes far beyond that. The author loves the idea, and the potential value of internal auditing, but he is disappointed by the situation and the direction the profession has been taking. Having co-authored an article about the Global Internal Audit Standards (Lenz-O’Regan 2024)[1], I share David’s preference for truly principle-based professional standards. In this book he diagnoses more areas that deserve attention. He does not only point to issues, but he also offers his perspective on how to bring the internal audit profession to a better place.

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Since joining the profession in 2007, internal auditing has been at crossroads several times, since ever it feels, both practical and conceptual. Now things are different. In July 2024, the global standard setter, The Institute of Internal Auditors Inc. in the US, has officially confirmed: “We must transform now or risk becoming irrelevant by 2035” (Anthony Pugliese, President and Chief Executive Officer).

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David’s book comes timely. He challenges the present narrative of internal auditing. David views internal auditing as creative and humanistic art. David suggests freeing up that creativity, individual judgement, and critical thinking. His critique suggests putting less weight on algorithms and checklists. He sees value in the cultivation of virtues, such as wisdom, courage, moderation, and justice. David references Aristotle’s “Golden Mean” as orientation, also when dealing with ethical considerations, referencing “white collar” acts of corruption of corporate executives and low-paid clerks’ misappropriation of “a can of sardines from an organization’s stocks to feed her starving family.” Furthermore, he points to dilemma, ethical conflicts, such as loyalty to the organization and loyalty to serve the public interest.

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I particularly enjoyed reading chapter 6: “Toward a Renaissance of Internal Auditing?” This is forward looking, exploring innovative paths to make better. Admittedly, it is flattering to read his appreciation of the suggested metaphor of the effective internal auditor as a “gardener of governance” (Lenz and Jeppesen, 2022)[2]. All eight areas for improvement deserve further discussion in the global professional community of internal auditors, (1) principles-based professional standards, (2) an abstract body of knowledge, (3) “big picture" perspectives and the importance of history (spoiler alert: there were permacrisis before our time), (4) qualitative assessment, (5) the importance of skepticism, (6) the primacy of (Aristotelian) logic in internal auditing, (7) curtailing the commodification of internal auditing, and (8) universality and subsidiarity in internal auditing. I love and support David’s plea for a competition of ideas beyond the mainstream. That may unlock innovative ideas, strengthening internal auditing theory and practice.

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David’s book is a fascinating read. I look forward to receiving a signed hard copy. I will re-read again then, and I am positive to find many gold nuggets I have not yet discovered.

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Thank you, dear David, for sharing the submitted manuscript with me, and your kind invite providing a brief book review.

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September 2024 - Rainer Lenz

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#internalaudit #profession #future

[1] Lenz, R. and O’Regan, D. J. (2024), The Global Internal Audit Standards – Old Wine in New Bottles? EDPACS, 69:3, 1-28 https://doi.org/10.1080/07366981.2024.2322835

[2] Lenz, R. and Jeppesen K.K. (2022), The Future of Internal Auditing: Gardener of Governance, EDPACS, 66:5, 1-21 https://www.tandfonline.com/doi/full/10.1080/07366981.2022.2036314