1. Strategy: What is the strength of governance surrounding how an entity’s strategic plan is developed and monitored?
2. Reputation: Is there awareness regarding third party’s opinions about the organization in the social media and what risks that uncovers for the company?
3. Finance: What controls exist around revenue recognition in the company?
4. Left side: Are items that should have been expensed such as Other Assets, PP&E and Capitalized Software among others, remaining on the left side of the balance sheet?
5. Right side: Is there a sufficiency of capital when juxtaposed against the company’s strategic plan?
6. Market, interest rate and liquidity: The previous 24 months have revealed seismic shifts in liquidity availability – has liquidity been moved from the right side of the balance sheet back to the left side?
7. Compliance and regulatory: Is the GC’s office structured and prepared for increased demands of regulatory compliance? Is there awareness as to the impact of key regulators on aspects of your operations? What are the important compliance issues that could instigate class action litigation?
8. Sales: Is the company in compliance with all aspects of the FCPA?
9. Production: Do the metrics and quality assurance procedures (domestic and international production facilities) ensure safety and quality of products?
10. Research and engineering: Are protocols sufficient to determine if new products will drive consumer demand – or has there been a failure to keep up with market trends?
Nice summary of points Walter. With respects to #1 regarding the strengthening of governance surrounding an entity’s strategic plan, I agree that this is the most critical; however this is often easier said than done and requires full Board and Management support for the Internal Auditor to effectively carry-out this type of audit work and summary reporting. We all have the obligation to ensure the entity carries out its mission, the Board, the Management, and the Internal Auditors. Together, we serve as the “check and balance” system that deters and prevents self-serving interest from superseding that of the Entity in which we serve. The Board and Management must be receptive and willing to engage in the open, candid, and constructive dialogues with the Internal Auditor regarding their views on the effectiveness of the existing governance structures and processes. We must prepare for these candid dialogues by accepting the fact that we must discuss the two topics we are often discouraged to bring to the table – organizational “religion” and “politics.” In the end, these types of periodic candid and constructive dialogues are what will make the difference between those Entities that thrive, die, or barely stay alive.