BREAKPOINT

Abstract

The framework for understanding the cycle of change is based on the natural laws of systems and how they adapt to changes in the environment. This framework has been called the "Transformation Theory." Transformation Theory suggests that human social systems and physical and biological systems are similar in the way they react to changes in the environment. Just as successful organisms adapt to their environment and change as the environment changes, it is also true of organizations which must change as the environment changes. Internal auditors need to understand the forces making the changes. One element of Transformation Theory is that systems inevitably reach breakpoint - a phase where the rules of change also change. All successful systems are impelled by 3 breakpoint principles: future pull, creativity, and connecting. Changes in the environment are pulling auditors to another breakpoint. Audit is the process of comparing "what is" to "what should be." The new source of "what should be" is the shared vision of the organization.