In The Closing of the Auditor’s Mind?, author David J. O’Regan describes internal auditing as an important "binding agent" of social cohesion, for the accountability of individuals and organizations and also at aggregated levels of social trust. However, O’Regan also reveals that internal auditing faces two severe challenges – an external challenge of adaptation and an internal challenge of fundamental reform.
The adaptation challenge arises from ongoing, paradigmatic shifts in accountability and social trust. The command-and-control, vertical hierarchies of traditional bureaucracies are being replaced in importance by networked, flattened patterns of accountability. The most challenging assurance demands of the modern era are increasingly located in three institutional domains – in the inner workings of organizations; in intermediary spaces at organizational boundaries; and in extra-mural locations. Internal auditing continues to cling, barnacle-like, to the inner workings of traditional, bureaucratic structures, and it has little to offer the emerging assurance demands on or beyond institutional boundaries. The reform challenge arises from internal auditing’s prevailing tendency toward a rigid, algorithmic, checklist mindset that suppresses practitioners’ creativity and critical thinking. This trend is increasingly narrowing internal auditing’s intellectual and moral horizons. Under the pressures of these challenges, internal auditing is struggling to fulfil its primary purpose of serving the public interest.
O’Regan’s powerful book focuses on:
- The redistribution of social trust from traditional, hierarchical institutions to diffuse, horizontally distributed networks
- The perennial validity of the classical virtues as the humane foundation of professional activity
- The role of creative expertise in promoting professional wisdom
The Closing of the Auditor’s Mind? is a philosophical audit of a profession on the threshold of crisis. The book presupposes no prior knowledge of philosophy, nor indeed of auditing. Philosophical technicalities are contained in an Appendix, leaving the main text jargon-free. O’Regan provides original and striking perspectives on the malaise of modern internal auditing, and he proposes radical remedies. This captivating and well-informed book is a must-read for all who are concerned with our collective socio-economic and political well-being.
Table of Contents:
Preface. A Note on Methodology. Acknowledgements. Abbreviations. Glossary. 1 Introduction. 2 The marginalization of internal auditing in a post-bureaucratic age. 3 Social trust and the audit society. 4 The corrosion of professional virtue in internal auditing. 5 Numbers, wisdom, and internal auditing follies. 6 Toward a renaissance of internal auditing? 7 Concluding thoughts. Appendix A – Philosophical notes. Appendix B – Aphoristic wisdom. References. Index.
About the Author :
David J. O'Regan has authored nine books on auditing and related themes. His interests include the application of Aristotelian logic to the auditing process, and he is the author of the Auditor's Companion: Concepts and Terms from A to Z (Georgetown University Press, 2024). He earned a doctorate in accounting and finance from the University of Liverpool and is a Fellow of the Institute of Chartered Accountants in England and Wales. His auditing experience covers more than three decades, spanning the private, public, and academic sectors. He commenced his career in the United Kingdom with Price Waterhouse, a forerunner firm to today's PricewaterhouseCoopers, and subsequently worked in industry before heading the internal audit function at Oxford University Press. He then entered public service in the United Nations system, initially at the Organisation for the Prohibition of Chemical Weapons in The Hague, Netherlands. From 2009 he has served as Auditor General to the Pan American Health Organization in Washington D.C.
Review :
“The Closing of the Auditor’s Mind? How to Reverse the Erosion of Trust, Virtue, and Wisdom in Modern Auditing” (2024) by David J. O’Regan is a goldmine for all professional peers in the governance and audit arena caring about the betterment of internal auditing on a macro- and micro level, as a profession and as practitioners…It is a comprehensive read benefitting from the author’s rich intellectual capital…He does not only point to issues, but he also offers his perspective on how to bring the internal audit profession to a better place.
In July 2024, the global standard setter, The Institute of Internal Auditors Inc. in the US, has officially confirmed: “We must transform now or risk becoming irrelevant by 2035” (Anthony Pugliese, President and Chief Executive Officer). David’s book comes timely. He challenges the present narrative of internal auditing. David views internal auditing as creative and humanistic art. David suggests freeing up that creativity, individual judgement, and critical thinking. His critique suggests putting less weight on algorithms and checklists. He sees value in the cultivation of virtues, such as wisdom, courage, moderation, and justice. I particularly enjoyed reading chapter 6: “Toward a Renaissance of Internal Auditing?”…David’s book is a fascinating read.
The full version of the review can be found via the following social media post:
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– Dr. Rainer Lenz
Internal audit and internal control have become increasingly important due to the need to manage processes brought about by technological advancements and to identify and mitigate risks. However, their relevance has sometimes led to a lack of awareness regarding potential issues. Dr. David J. O’Regan’s book serves as an essential resource for navigating this complex situation that internal audits face. It raises thought-provoking questions that compel readers to reflect and reconsider their perspectives. Additionally, the book provides a historical overview and explores philosophical concepts, making it particularly valuable for those involved in auditing activities.
The book is approached with a blend of practical experience and scientific knowledge, which opens up two important avenues for the future. First, it addresses the need to establish rules for auditing artificial intelligence that arise from technological advancements, alongside ensuring the effectiveness of internal audits. Second, it highlights the necessity of creating a foundational understanding of ethics and developing approaches to audit these ethical standards.
Dr. David J. O’Regan highlights a critical challenge in internal auditing: the difficulty of complying with the evolving dynamics of social trust and capital. This shift has led to a loss of a vital position within the “seat at the table”. The new societal structure, characterized as a "risk universe," has emerged as a digital risk society that requires protection akin to handling crystal. In this context, internal audit becomes an essential control tool. The sections of the book aim to awaken the readers from a metaphorical deep sleep and address the implications of losing its significance and impact.
We would like to extend our gratitude to Dr. David J. O’Regan for offering us a new perspective on the importance of analyzing the spreading effects of risks and their potential consequences. This book not only serves as a “wake-up call” for internal auditors but also acts as a valuable reference for professionals in cybersecurity, artificial intelligence, and the auditing of AI systems. Additionally, it is relevant for those involved in developing ethical guidelines in our increasingly risk-driven, digital society and for consultants who support these efforts.
This work serves as a reference source that clarifies and guides the understanding of risk and control, i.e. “riskification” and “the dangers of a ritualization of practices” in a digitalizing world, focusing on sociology and behavioral sciences in relation to the historical and philosophical aspects of internal auditing.
– Sezer Bozkus Kahyaoglu, PhD
CIA, CFE, CFSA, CRMA, CPA
Associate Prof of Finance
David J. O'Regan’s The Closing of the Auditor’s Mind? is a thought-provoking and timely examination of the challenges facing modern internal auditing. With a sharp critique of the profession’s growing reliance on rigid, algorithmic approaches, O'Regan argues that internal auditing is at risk of losing its intellectual agility, creativity, and moral judgment. He highlights how the shift from hierarchical accountability to decentralized, networked trust structures has left auditors clinging to outdated methodologies, unable to meet the evolving demands of assurance in a rapidly changing world.
What makes this book stand out is its philosophical depth. O'Regan draws from classical virtues, history, and even neuroscience to explore how auditing has become a mechanistic exercise, detached from the human judgment and wisdom it once embodied. He challenges auditors to reclaim their role as critical thinkers and ethical stewards, rather than mere box-checkers. Whether you are an auditor, a governance professional, or simply someone concerned with the broader implications of trust and accountability, this book is an essential read. It not only diagnoses the malaise within auditing but also offers compelling solutions to restore virtue and wisdom to the profession.
– Gary Craven, P.Ag., FCMC, ITCP
Partner, Paradigm Consulting Group
