Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security; prophetic words from mathematician John Allen Paulos that resonate in the changing and uncertain world of corporate regulation and legislation.
Uncertainty of itself is not the issue. The issue arises when decisions have to be made, choosing a course of action based on incomplete knowledge. For auditors who gather evidence to form an objective opinion, uncertainty is the antithesis. This paper will briefly explore the complex regulatory landscape that heads of internal audit (HIAs) have to navigate and consider how the complexity and uncertainty of such change can be managed. It is sector generic and by looking across rather than into the detail, there may even be a nugget of new insight for seasoned HIAs from highly regulated industries.
Uncertainty is one quarter of the VUCA acronym; volatility, uncertainty, complexity and ambiguity; the buzz phrase within risk management circles and relevant for compliance today and the challenges that face HIAs.
Source: Harvard Business Review January–February 2014 Issue
Whether it has been preparations for MiFIDii, new accounting standards, GDPR, modern slavery reporting or Brexit, HIAs cannot avoid regulatory and legislative change. The growing awareness of the need for good governance of organisations, society and the planet mean that the trend is unlikely to abate for increased compliance with mechanisms that direct and control the actions of others.
In addition to evolutionary changes, there is also the potential for political change as a result of Brexit. The EU Withdrawal Bill aims to transfer an estimated 12,000 EU regulations into UK law for simplicity; however the ‘where practical’ caveat may suggest that some change is inevitable in the transition of control.
Ten years ago many HIAs would have been content to carry out…
"People lose their way, when they lose their why"
- Michael Hyatt, Author