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IIA CEO looks ahead as internal audit expands globally

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Anthony Pugliese, president and CEO of the Institute of Internal Auditors, is traveling the world as his organization expands globally, while laying the groundwork for priorities in the decade ahead.

The IIA released its Vision 2035 report at its international conference in Washington, D.C. in July. Pugliese wants to ensure the internal audit profession is where it should be by 2035. 

“There are a lot of misconceptions about what internal audit is,” he told Accounting Today. “The current perceptions do not align with what the profession actually does.”

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Institute of Internal Auditors president and CEO Anthony Pugliese speaking at the IIA’s General Audit Management conference in Las Vegas

The report points to the need for internal auditors to embrace advanced technology. “We can see our members all basically think technology is critical, but we’re not seeing the kind of uptake that would actually demonstrate that we’re going to be known for being technology savvy,” said Pugliese. 

The report recommends internal auditors need to expand the entire scope of the work they’re doing. That aligns with a separate set of Risk in Focus studies that the IIA issued in September. “We don’t want to be only Sarbanes-Oxley or just internal controls over financial reporting, but we want to be known for these other things that a lot of our members are already doing,” said Pugliese. “Expansion of scope is important.”

Other priorities include connecting internal audit with the strategy of a company as well as growing the pipeline of internal auditors.

“When we position internal audit in front of a bunch of accounting students, the reaction is actually really positive,” said Pugliese. “They see it as a completely different path, and one that doesn’t carry the reputation negatively of public accounting, which I think they’re trying to get away from. Actually we’ve seen a lot of students get excited by the fact that they can become internal auditors and still work for a big firm. So the two can actually co-exist on their resume, on their CV, and that’s really attractive.”

Internal auditors have increasingly become fraud fighters. “We found out in our Vision project that more and more internal auditors are becoming responsible for functions other than internal audit,” said Pugliese. “What we’re seeing now is that they’re moving functions like compliance or fraud into internal audit’s bailiwick.”

Pugliese is seeing growing interest in climate change and sustainability risks. 

“Last year, in 2023 our members around the world rated climate change sustainability reporting as the 14th most prevalent risk, and then this year, it moved to 13,” he said. “But in three years, our members predict it’ll be either four or five.”

The IIA released its updated Global Internal Audit Standards in January 2024 and they are set to take effect in January 2025, going deeper now on individual topics. “We started a big project that we call topical requirements, which is the first time we’ve actually started to require minimum levels of work to be done before an internal auditor can issue an assurance level opinion on certain topics,” said Pugliese. “The first one out of the gate is cyber. We think of it as a cyber standard. They have to follow it as members, but it was really because the area is somewhat mature. Cyber issues have been around since the late 1990s, early 2000s, and it’s a mature topic, but one that’s getting more and more risky over time. I think AI made that worse, so the need for standards is to ensure we’ve got a minimum level of performance occurring anywhere in the world.”

The IIA has been releasing tools to help internal auditors adjust to the updated standards. “Getting ready for the standards has been a big deal for us,” said Pugliese. “We’ve been releasing tool after tool after tool, some free, some we charge for, because the world that relies on internal audit is affected as well.”

The IIA is seeing more demand for such material as the organization expands globally. “You could pick up an internal auditor’s opinion on cyber and it would carry the same weight in Africa as it would in Latin America or North America, that there could be a level of reliance, and that’s because of all of our advocacy work, that we felt that was important,” said Pugliese. “We get out there and tell governments, you can rely on internal auditors to help you do some of this work. Having a standard around topics is not very unusual in the accounting world, but it is in the internal audit world.”

The IIA has been growing and has now crossed the 250,000-member mark. “We’ll end up this year probably at 255,000 with a lot of growth occurring in Asia and the Middle East, which is great,” said Pugliese. “We really didn’t have a strong market in the Middle East even five years ago, so we’re happy about that.”

He has been finding growing interest in Saudi Arabia, Oman and other Gulf countries, as well as parts of Asia like China and Japan. The Saudi Minister of Audit sits on the IIA’s global board.

“When they give out awards to say this is the best internal audit team of the year, or the most innovative team of the year, it’s a really big deal,” said Pugliese. 

He noted that many countries around the world have what they call Supreme Audit Institutions, SAIs, and there’s an association for these Supreme Audit Institutions known as INTOSAI, the International Organization of Supreme Audit Institutions. The IIA has been getting more involved in such groups.

In the U.S., the IIA has also been working more closely with the Public Company Accounting Oversight Board after clashing last year over some parts of the PCAOB’s confirmation standard that seemed to unfairly blame internal auditors. “The standard basically stated that external audit should control the entire process, and the example they gave was that because employees like internal auditors would be more apt to change the confirmation,” said Pugliese. “We asked for what data supported that in the United States or anywhere else in the world, and we realized that they were unable to produce any data to support that.”

The IIA started a letter-writing campaign and met with four of the PCAOB’s board members, including a former internal auditor, Christina Ho. Eventually the objectionable section was deleted in the final version of the standard, and the PCAOB even apologized in the disposition of comments.

“You couldn’t ask for a better outcome,” said Pugliese. “It was no disrespect, no harm intended. But, because of that, we started a relationship and now, when they call and they want to have a really solid task force on any given topic, they’ll reach out to us for an internal auditor, and that really is nice. So it was kind of lemonade out of lemons as a result of that, but it was not a fun process to go up against the PCAOB.”

The IIA started its own political action committee last year and plans to do more advocacy work in the U.S. and abroad. “We’re introducing some advanced advocacy strategies next year to start lobbying national governments outside of the United States,” said Pugliese. “They’re not quite used to the system that we have in place, where you hire people in Washington, and they target the right people setting laws that are relevant to you, and you go talk to them, and hopefully you get an output. This is very different. We’re doing it in Africa and we’re trying to make sure that their advocacy needs are met. We’ll probably have one in the Middle East, which is very unusual, but that’s more of an informing function for the countries that are more monarchy based. You don’t typically lobby a monarchy. In Latin America as well, we’re going to start lobbying those governments to more adequately recognize what internal audit does.”

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Trump berates Republicans to ‘Stop talking,’ pass tax cuts

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Donald Trump listens to a question while speaking to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C.
Donald Trump

Al Drago/Bloomberg

President Donald Trump called on members of his party to unite behind his economic agenda in Congress, putting pressure on factions of lawmakers who are calling for last-minute changes to the legislation to drop their demands.

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

Trump sent the post from Air Force One after departing the Middle East as the House Budget Committee was meeting to approve the legislation, one of the final steps before the bill can move to the House floor for a vote.

House Speaker Mike Johnson has set a goal to pass the bill next week before the House recesses for its Memorial Day break.

However, the the bill failed the initial committee vote — typically a routine, procedural step — with members of the party still sparring over the scope of the cuts to Medicaid benefits and how much to raise the limit on the state and local tax deduction.

Narrow majorities in the House mean that a small group of Republicans can block the bill. Factions pushing for steeper Medicaid cuts and for an increase to the SALT write-off have both threatened to defeat the bill unless their demands are met.

“No one group gets to decide all this stuff in either direction,” Representative Chip Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Trump’s social media muscle and calls to lawmakers have previously been crucial to advancing his priorities and come as competing constituencies have threatened to tank the measure.

But shortly after Trump’s Friday post, Roy and fellow hardliner Ralph Norman of South Carolina appeared unmoved — at least for the moment. Both men urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time”

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97% say CPA firms not using tech efficiently says survey

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While CPA firms far and wide have made major technology investments over the years, the vast majority of accountants say they’re not being used to their full potential. 

This finding comes from a recent survey undertaken by CPA.com and payment solutions provider Bill. The 400-person poll found that nearly all respondents, 97%, say they use technology inefficiently and that additional training is needed to maximize return on investment. Further illustrating the point, 43% of respondents said that technology is making them do more manual work, not less, something. Becky Munson, an Eisner Amper partner specializing in outsourced accounting services, believes this reflects a failure of training and change management, as she has seen many who disliked a technology change develop manual workarounds specifically to avoid using the new solutions. 

“We see employees make workarounds with tech stacks, which makes headaches that I think align with this 43%. We train people on new things, we ask them to use them, and they keep doing what they were doing before and only use the technology as much as they have to [in order to] move things along while you have people well trained on the software keeping up,” she said in a webcast on Thursday about the survey. 

Inefficient

Ariege Misherghi—senior vice president and general manager of accounts payable, accounts receivable and the accountant channel—said the issue isn’t just because of firms but also vendors that don’t provide enough support, and may not necessarily understand the profession in the first place. 

“Too often I think tools aren’t fully aligned with the workflows they’re meant to support. In SaaS they talk about product-market fit, but in this profession it’s not just that but also product-firm fit, and maybe product-profession fit. Not every tool marketed to accountants was built by people who truly understand how this profession works: the rhythms, the regulations, the stakes, the relationships, all of that. And even the greatest tools can fall short if they’re not implemented with a deep understanding of how firms really operate,” she said. 

And sometimes the inefficiencies come from both sides at once: the survey found that only 37% of firms require clients to use their tech stack, something that Munson said “breaks my heart” as “it is so low.” A streamlined, established tech stack is needed to achieve true economies of scale, but to get there firms need to standardize their data, and to do that firms need to make sure their clients’ data is also standardized, which usually means integrated tech stacks. 

“If you have all these different clients with all these different technologies, even if your own tech stack is standardized the systems they use is different, so the kind of data you will get will be different, and the work you need to do to make it work with your data is different, and your team spends a lot of time spinning their wheels,” she said. “Once you get standardized, where everything back and forth from clients is the same, you get to see how well the teams can do their work.” 

One source of inefficiencies is a rushed implementation. Munson said that, too many times, firms are so eager to get a solution working that they don’t pay attention to all its capacities, just the ones they need right now, but once the basics are down firms still don’t circle back on the rest of the features and how they can be used to drive efficiency. 

“Most of us have been through an implementation, either in the practice or with a client, where you’re just like ‘anything to get it working. Forget about all the fancy things it does. We just needed to do the basics right,’ and then we never circle back on those better, more efficient processes. We get to sort of minimal viable, and then we forget to come back and give it an extra polish. And so what we see there is the processes get written for that basic piece, and we never update,” she said. 

But this is part of what both speakers believed was the larger problem of firms getting lost in the details of their tech stacks and not taking a broader, more holistic approach, which would enable more efficiencies. The key component to managing technology effectively, Munson said, is looking not at individual solutions here and there but thinking of the system as a whole. 

“Often, what happens is something’s wrong or something is troublesome in some way. And so [we say] what can we do to fix that one thing? And we don’t think about it holistically and get all the right folks in there so that we’re solving for the right pain points,” she said. 

Misherghi agreed, and added that this holistic extends not only to the technology a firm already has but the solutions they plan to purchase in the future. When evaluating what technology they need, she said leaders need to think not in terms of specific point solutions to particular problems but things that can support the entire workflow—plus, the onboarding, training and ongoing support from the vendor. 

“Don’t just look for features, right? Look for solutions that support your workflows from providers that understand you. For firms, onboarding and training and optimization can’t be an afterthought. They’re essential to realizing value. I think this is where vendor partnerships matter. Firms seeking the strongest results aren’t just using software, they’re collaborating with their providers, they’re staying educated, they’re making sure their tools evolve alongside their needs. The best outcomes happen when your technology partner acts like part of your team, not just part of your toolkit,” she said. 

Misherghi said that the more successful firms she’s seen think less in terms of performing particular tasks but designing an entire system that, through automation, can do those tasks for them. It is less about plugging holes and more about developing a full infrastructure. The survey found that 74% of participants have a detailed plan to add new services in the next 12 month; Misherghi noted that, among these firms, 86% have a detailed technology roadmap, which is “a wonderful mark on the evolution of the profession we’re seeing.” 

She said a good tech roadmap is more like a service design blueprint versus a shopping list. Successful firms, she said, are not just chasing features but designing intentional workflows and systems capable of scalable service delivery. Similarly, she stressed that the provider should be more than just a vendor but a strategic co-architect that can help with growing pains. 

Misherghi said this approach will become especially relevant as AI becomes more common, as integrations will be key to their effective use, which means thinking in terms of the whole system to understand where those integrations should take place. Right now, she said, people think of AI in terms of analyzing data or extracting fields, but with the rise of AI agents will require firms to focus more on coordinating between them. 

“I think the next big leap is when those systems don’t just talk to each other, they act on each other’s behalf. I think the next big inflection point will be moving from automated steps to autonomous workflows, where AI agents aren’t just analyzing data or extracting fields but actually orchestrating tasks across tools based on firm policies and context and that will change the role of the accounting profession: its less time doing the work and more time designing the system for how everything works together. So the firms that will be thriving are those who are building strong infrastructure now because that is what AI needs to deliver on its core value,” she said.

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Trump tax bill fails in House panel

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A key House committee on Friday failed to advance House Republicans’ massive tax-and-spending bill after hard-line conservatives bucked President Donald Trump and blocked the bill over cost concerns.

The House Budget Committee rejected the bill 21-16, with Republican Reps. Chip Roy, Ralph Norman, Josh Brecheen, and Andrew Clyde joining Democrats to vote against it. The four hardliners demanded deeper cuts to Medicaid and other government programs.

It’s incredibly rare for bills to fail at this step in the process, with the committee vote typically serving as a rubber-stamp to the bill before it moves to the House floor. 

Representative Chip Roy
Rep. Chip Roy

Stefani Reynolds/Photographer: Stefani Reynolds/B

The setback could be temporary and the panel can still approve the bill once the GOP differences are resolved. 

Republican Lloyd Smucker, who switched his vote to “no” to allow the committee to bring it up again, told reporters the committee will hold another vote on Monday. 

Trump, whose social media muscle and calls to lawmakers have previously been crucial to advancing his priorities, inserted himself in the debate less than two hours before the vote, berating dissidents and urging them to fall into line. 

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

The bill’s failure exposes the power a small group of lawmakers can wield as Republicans seek to push Trump’s “one big, beautiful bill” through the House with very narrow margins. GOP infighting threatens to kill the bill, or at least significantly delay Republicans’ plans to pass the bill next week.

(Read more:‘One big beautiful bill’ full of tax surprises.”)

Republican holdouts spelled out their demands during Friday’s committee meeting, including accelerating new work requirements for able-bodied adults on Medicaid to take effect immediately rather the 2029 deadline set in the legislation. The ultraconservatives also want a faster phase-out of clean energy tax credits.

It wasn’t immediately clear how House Republicans will re-group to address the divisions and advance the bill.

“I’ll let you know this weekend if we’re going to return first thing Monday. That’s the goal at this point,” Budget Chairman Jodey Arrington said after the vote. 

House Majority Leader Steve Scalise, who is helping to broker a deal among Republicans, said party leaders are in touch with the Trump administration to address some of the changes demanded by hardliners.

“We are all in agreement on the reforms we want to make,” Scalise said. “We want to have work requirements. We want to phase out a lot of these green subsidies. How quickly can you get it done?”

House Speaker Mike Johnson on Thursday pledged he would work through the weekend to broker a compromise between moderates, who are seeking an increase in state and local tax deductions, and ultra-conservatives, who say they won’t support it without more spending cuts.

(Read more:Here are the winners and losers in the Republican tax bill.“)

Members from both factions — the SALT Republicans representing high-tax districts and the fiscal hawks who want steeper budget reductions — have threatened to block the bill if House leaders don’t acquiesce to their demands. 

“No one group gets to decide all this stuff in either direction,” Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Both Roy and Norman urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time.”

If the legislation passes the House, it would then head to the Senate where it would likely undergo significant changes. Several members, including Senator Josh Hawley of Missouri, have stated opposition to the Medicaid cuts in the House bill.

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