| 127 Auditing the Board: A New Approach to the Measurement of Company Performance by R. J. Taffler and P. S. Sudarsanam Introduction The role of the internal auditor is evolving rapidly. More and more his ambit is encompassing the whole range of a company's operations. His activities no longer primarily consist of checking for compliance with laid down procedures but are becoming more management orientated and focused on the appraisal of efficiency and effectiveness of operational systems in general. 1 These developments are ack- nowledged in the Introduction to the new IIA Standards: (IIA, 1978, p. 1): "The objective of internal auditing is to assist members of the organisation in the effective discharge of their responsibilities. To this end, internal auditing furnishes them with analyses, appraisals, recommendations, counsel, and information concerning the activities reviewed. The members ofthe organisation assisted by internal auditing include those in management and the board of directors. Internal auditors owe a responsibility to both, providing them with information about the adequacy and effectiveness of the organisation's system of internal control and the quality of performance." However despite the view gaining wider acceptance that no area of an organisation's activity should be exempt from the purview of the internal audit function, 2 and exhortations to the internal auditor to take a broad view of his responsibilities (e.g. Light, 1976), he has yet to venture to any degree away from the appraisal of operational level systems into more strategic areas. Yet the internal auditor is in an ideal position, through his knowledge of all parts of the organisation and his isolation from day to day line management responsibilities, to stand back and contribute to its longer term performance and success in more fundamental ways. There would appear no logical reason why internal audit reports should not recommend such things as the introduction or discontinuance of product 1. See for example IIA, (1976, a and b) and Miguel et al (1976) summarised in Chambers (1978). 2. Eg: ".... internal auditors are concerned with any phase of business activity in which they may be of service to management". Statement of Responsibilities of Internal Auditors (IIA, 1971) and "It (internal auditing) may be concerned with any activity of the organisation". Exposure Draft of the Standards for the Professional Practice of Internal Auditing (IIA, 1977, p. 17). Note however the backtracking in that neither this sentence nor any substitute appeared anywhere in the published Standards (IIA, 1978).