Internal Auditors' Independence Matters, just like External Auditors!

TO: ADVOCATE P. GWEBU, CONSTITUTIONAL REVIEW COMMITTEE, PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA
Submissions: annual review of the constitution
Date: Monday May 11 2020
Proposal: Strengthening our constitution by legislating appointment of internal auditors per constitution rather than by choice as is currently the case
Background
I have noticed a fundamental and systemic flaw in our global governance model - this includes South Africa. Until this flaw is corrected, and immediately, the world will keep beholden to rampant social ills. Social ills have mutated into a quagmire. Please remember that to resolve any quagmire problem, a silver bullet solution is needed. By that I understand a simple, immediate and effective solution.
Organizational Governance in South Africa has been very lax. This is evidenced by our failure to curb inequality, unemployment and poverty. To curb these three key social ills challenges under and post the corona virus pandemic will be next to impossible unless our constitution is strengthened with the inclusion of preventative controls under our chapter 9 institutions section.
Currently, South Africa follows the below three pillars model of Governance:

IMPLICATIONS AND EFFECT OF THIS THREE PILLARS OF GOVERNANCE MODEL:
● Internal auditors are appointed by organizations as and when management sees the need
● Many organizations do not even have internal auditors in their governing structures
● Internal auditors are the weakest link of the three pillars. They report to management. Their reports end internally with management. Their reports may be ignored! This is a foundational / systemic flaw. We’ll forever be stuck with rampant social ills as only management has access to internal auditors’ reports. Internal auditors do not have independence.
● Many organizations/governments govern recklessly, knowing fully well that the TRUTH of what is going on in their governments/organizations will never be revealed. Always boasting that they have external audit reports. Knowing fully well though, that external audit reports on historical data.
FUTURE GOVERNANCE MODEL DURING AND POST CORONA VIRUS: FOUR PILLARS OF GOVERNANCE:

IMPLICATIONS AND EFFECT OF THIS FOUR PILLARS GOVERNANCE MODEL
● Makes internal auditors independent of Board/management – almost immediately.
● Internal auditors’ reports will now form part of organizational annual reports
● Once part of annual reports, governments/shareholders and public will have access to internal auditors’ reports as well
● Governments/shareholders will now re-claim their governance roles that they abdicated to different organizations
● Governments will now be able to fully govern through the constitution, based on ongoing feedback by internal auditors
● Through comprehensive organizational reports, public will now be able to trace and track the ROOT causes of the quagmire of social ills. Be it endemic wars in the world, endemic world inequality and endemic global rampant fraud and corruption, violence, hunger, poverty etc.
RECOMMENDATION
To catapult our constitution from good to great, please add to our chapter 9 institutions an institution called the commission for internal auditors. Internal auditors focus on preventative controls. This will come as great relief to external/Auditor general as they will now, and rightly so, be able to focus on detective controls. Post the corona virus, I do not see how our Government could truly govern without the support of independent internal auditors.
I THANK YOU. GOD BLESS US ALL!
Kgosiemang Esau Moloko
Auditor Activist
B. Com Acc (UL), B. Com Hons Auditing (UNISA), MAP & MBA (WITS)
11 May 2020