This week I have had the opportunity to visit Russia for the first time. After three days of meetings with senior government officials and chief audit executives of leading Russian companies, my optimism about the future economic development of this country in general, and IIA–Russia in particular, is very high!

At the end of December, I offered my opinion on the five defining events of the past decade for our profession. These types of lists are often best drawn up with the benefit of hindsight. After all, it is easy to get caught up and start offering hyperbole about virtually any event that happens.  However, there are some events that are obviously “game changers.” One such event may just have occurred for our profession.

Call me sentimental, but I’ve always found it intriguing when twists of fate take people “full circle,” and reconnect them with an event or a milestone earlier in their life. Today I am having one of those experiences myself.

In late December, I wrote about the five events that defined the past decade for internal auditors. It is too speculative (and far too early) to predict any defining events for the next decade. However, I do have some views on key imperatives that internal auditors must pursue if we are to build on the success we enjoyed during the past 10 years.

In the event you missed it, the U.S. Securities and Exchange Commission (SEC) announced the adoption of new rules on enhanced proxy disclosures (PDF) December 16, 2009. The new rules will likely have far-reaching impacts on risk management and corporate governance in the U.S.

One of the most significant developments of the internal audit profession in the past decade has been its rise in stature relative to audit committees. A decade ago, a chief audit executive (CAE) with a functional reporting relationship to the audit committee was considered a “leading practice.” Today, it’s the norm.

As the decade comes to a close, the media seems to be awash with reports reflecting on milestones of the 2000s. Some have focused on the top new stories of the decade, while others focus on entertainment milestones, such as the best movies or sports events over the past 10 years. This has gotten me thinking about the most significant events of the past decade that have impacted the profession of internal auditing. I’m sure there were many events in global regions or individual countries that would make the list depending on where you practice internal auditing; however, I’ve compiled my list of the five events that defined the decade for internal auditors.

Throughout my career of more than 30 years as an internal auditor, I’ve seen several recessions come and go, and the impacts on the internal audit profession (WMV video file) have followed predictable patterns each time. I’ve seen operating environments shift and require internal auditors to reach into their skill toolbox and demonstrate their agility and versatility. The recessions we’ve experienced in the past, and the one we’re facing currently, also foster an environment much more conducive to fraud schemes, and the internal audit activity is in a perfect position to show its value during these times.

One of the most predictable consequences of corporate financial failures is the inevitable finger-pointing that follows. There was plenty of finger-pointing following the Enron, World-Com, and other failures of the early 2000s, and it was sure to happen again following the financial failures of the past two years. Lately, however, I have noticed that the accusations are literally “going global.” As important as it is to understand the contributing factors, I believe it’s time to move forward with the design and implementation of corrective measures in corporate governance and risk management that will effectively mitigate the risks of calamities of this magnitude in the future.

As I have commented often in recent months, the current economic crisis has not been kind to internal auditing. Granted, we have not seen the level of layoffs or staff reductions that we may have seen in other professions, but there is plenty of evidence that our Sarbanes-Oxley era of prosperity has come to an abrupt halt. Following years of healthy growth, many internal audit activities reported budget and staffing reductions in 2008. This pain was nothing compared to what 2009 would bring. A recent Knowledge Alert (PDF) from The IIA’s Audit Executive Center reports on the results of a North American survey about the impacts of the economy on internal audit activities. The Knowledge Alert notes that 23 percent of all responding organizations — as well as 34 percent of survey respondents working for Fortune 500 companies — report that their internal audit staff levels had been reduced in 2009. This is a far cry from the year-over-year, double-digit increases that were being posted in 2004 and 2005.