Internal Audit vs Return to Greed
As I am about to sit down for a coffee with a well respected client from a top investment bank I hear him say something on the lines of "I'm out to get those bastards". The bastards he was speaking of were some of the people at the top of the food chain in the front office. The people who, due to greed, maximize self-takings whilst screwing everyone else down the chain, especially those at the bottom (often back office staff) whose families highly depend on their income.
Examples of greedy traders who step out of line are far too familiar, yet punishments of such acts (often highly illegal) do not really exist. I say they do not exist because cheating your way into ￡20 million then loosing your job doesn't count. The consequences however are paid by the supporting staff who are left jobless. Their ￡30k or ￡40k salaries is the difference between being able to pay their mortgage and ending up homeless.
So, where does Internal Audit come into all this?
As I am sure you may know - Internal Audit department assesses the firm’s internal control structure, advises management on developing control solutions, and monitors the implementation of these measures. Working in this department means one will be providing reasonable assurance that financial reporting is reliable, there is compliance with applicable laws and regulations and the firm’s operations are effectively controlled.
So, for someone to cheat their way to their ￡20 million they need an Internal Auditor to be "asleep"!
Although exaggerated it may seem, I have come to understand the difference between someone who understands their importance and others who neglect it. Someone who chose Audit as a career and others who use it as a stepping stone.
A great deal of work has taken place to extract the rotten apples who put businesses in great danger and many banks are investing in ramping up their audit departments but capitalism/greed will ensure the cat and mouse game will go on forever. The difference between a good auditor and a "bad" one is in the finer details and I will always remember the day I met a good auditor!
............................................................................................................................................. Please note this represents my views only and this article is not based on specific events