Internal Auditing

In the days following the collapse of Lehman Brothers and Bear Stearns, the one thing financial
examiners seemed to agree on was that the cause was, at least in part, a failure to implement or
respond to proper internal auditing practices. Although what's come to light reveals a much more
complex and systemic series of failures, it's clear that if the basic tenets of internal auditing had been
put into practice and internal controls respected, the firms would not have exposed themselves to
such unreasonable risk.
The Institute of Internal Auditors (IIA) is the foremost international professional association for
internal auditing. The IIA's globally accepted definition of internal auditing states that:

"Internal auditing is an independent, objective assurance and consulting activity

designed to add value and improve an organization's operations. It helps an
organization accomplish its objectives by bringing a systematic, disciplined
approach to evaluate and improve the effectiveness of risk management, control,
and governance processes."