Why Internal Audit Matters

Transcription

1 Why Internal Audit Matters Joseph Mauriello, CPA, CIA, CFE, CISA, CMA, CFSA, CRMA Director, Center for Internal Auditing Excellence The University of Texas at Dallas Financial Executives International Dallas Chapter July 12, 2016

2 First things first What is Internal Audit? Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organizationʹs operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Source: The IIA

3 First things first What is Internal Audit? Internal Audit brings a systematic and disciplined approach of evaluating and improving the effectiveness of the organization s: risk management control governance processes

4 Who is the IIA? Over 170,000 Members in over 120 countries More than 230 affiliates around the globe Recognized Authority on Internal Auditing Professional Development Activities Standards for the Professional Practice of Internal Auditing Web Site for more information

5 Mission of the IIA

6 IIA Timeline: Selected Milestones

7 IIA Certifications Certified Internal Auditor (CIA ) Certification in Control Self Assessment (CCSA ) Certified Government Auditing Professional (CGAP) Certified Financial Services Auditor (CFSA) Certification in Risk Management Assurance (CRMA)

8 Local IIA Chapters Dallas Chapter of the IIA over 2,000 members and one of the strongest in the country. One of the only in the world to achieve Platinum status. Website Ft. Worth also has an IIA chapter of over 600 members.

9 Internal Audit Today Allows for an expedient, high level understanding of the organization and industry Exposure to senior level management Leads to management positions Transferable skills/disciplines Networking opportunities Expanding Profession Potential travel

10 Internal Audit Today Emergence of Operational Auditing More focus on controls within the organization Assumed a Management Consultant role Compliance with company policies and procedures Evaluate the effective and efficient use of resources Investigated fraud and other special events such as mergers. Outsourcing and Co sourcing

11 Internal Audit s Role in the Organization Serves the Entire Organization Independent from Operating Management Partners with Management Participates with Improvement Teams & Task Force Processes Uses Technology

12 What s It Like to Be an Auditor? Entry Level Auditors Gain An Understanding of Organization Operations, Policies, and Procedures Learn The Business Develop Understanding Of Audit Techniques Enhance Interpersonal Skills Develop Written and Verbal Communication Skills Enhance Computer Skills

13 What s It Like to Be an Auditor? Auditor in Charge / Experienced Supervise Staff Manage Audits Train and Develop New Staff Develop Teamwork Solve Problems Build Rapport With Management

14 What s It Like to Be an Auditor? Management Responsibilities Building Rapport With Senior Management and Audit Committee Serving in an Advisory Capacity Training and Advancing Staff Competencies Developing Audit Plans and Budgets Participating in Professional Organizations Being a Valuable Resource for Improving the Organization

15 Value Proposition Internal Auditing: Assurance Insight Objectivity VALUE PROPOSITION OF INTERNAL AUDITING FOR KEY STAKEHOLDERS Governing bodies and senior management rely on internal auditing for objective assurance and insight on the effectiveness and efficiency of governance, risk management and internal control processes.

16 Value Proposition Internal Auditing Provides: Assurance that the organization is operating as management intends. Insight for improving controls, processes, procedures, performance, and risk management; and for reducing expenses, enhancing revenues, and improving profits. Objective assessments of operations.

17 Value Proposition Internal Auditors Have variety of skills, educational backgrounds, and expertise. Use their broad knowledge of the business to help management achieve its business objectives and assist the governing body in fulfilling its oversight responsibility. Are catalysts, risk and control experts, efficiency specialists, and problem solvers.

18 What should you expect from Internal Audit? Governing bodies and senior management rely on Internal Auditing for objective assurance and insight on the effectiveness and efficiency of governance, risk management and internal control processes.

19 What should you expect from Internal Audit? Governance, Risk, Control Internal Auditing, as one of the four cornerstones of corporate governance (along with the governing body, executive management, and external auditing) helps organization focus on strong controls, accurate reporting, effective oversight, mitigation of risks, and protection of investments. Assists management and governing bodies in identifying risks. Provides insight on effectiveness of controls and compliance with procedures and regulations, and recommends improvements.

20 What should you expect from Internal Audit? Catalyst, Analyses, Assessments As catalyst for improvement, evaluates processes, reports findings and recommends appropriate courses of action; and advises on key projects/initiatives. Through analyses of data and information, provides insight into process improvements. Through understanding of the business and its objectives, assesses the efficiency and effectiveness of operations and protection of assets.

21 What should you expect from Internal Audit? Integrity, Accountability, Independence Grounded in professionalism and integrity through professional Standards and Code of Ethics. Accountable in helping management and governing bodies achieve their objectives. To ensure independence, CAE should report to independent governing body for functional direction; and to management for administrative oversight. Maintains objectivity by not assuming any operational responsibilities.

22 Value Proposition Mapped

23 Value Proposition What would the world look like without Internal Auditors?

24 The choice is clear..

25 Value Proposition From June 2015 Article by Richard Chambers. Internal Auditors add value by: Providing objective and independent assurance and insight on how well risk and the mitigating controls are being managed. Helping an organization achieve its objectives and thus enhancing the value of the organization. Protecting Key Stakeholders (Not just limited to Investors, Employees, Management, and Board; think downstream impacts).

26 How do we prepare the next generation?

27 How do we prepare the next generation? Vision of the UTD IAEP Program Provide an internationally recognized internal audit program that develops well trained internal audit candidates from across disciplines to be future leaders in the profession.

28 What differentiates UT Dallas from the rest? University and Local Chapter Support Extensive Curriculum Diverse Student Population and Non Traditional Students Students come to the School because of the Internal Audit Program Technology Emphasis at UTD Closely tied to IIA International IAEP Branding and Working on IIA International Activities Very few programs tightly linked to IIA, ISACA and ACFE Many students start Internal Audit careers prior to graduation Tightly coupled to corporate internal audit groups Extremely strong student chapter

29 Our Requirements for Participation Key Requirements: Outstanding Communication Skills Motivated to Learn Internal Audit Any major or Graduate Program Classified as a Graduate Program No prerequisites

30 Core Internal Audit Class How is this different any other course? Preparing students for Internal Audit Careers Practical Internal Audit Experience Lectures on technical audit areas Current Topics Group Projects CIA Exam Preparation Currently about double the work than other graduate courses

31 Key Features of UTD Program Fifteen credits of internal audit and control related classes required. Twelve credits for other graduate degree programs Sit for CIA or CISA exam for IAEP Must participate in the UTD IIA Student Chapter Focus on practical audit experience through working with Internal Audit Groups Provide opportunities through internship and research opportunities Participation in student IIA chapter and attendance at local IIA and ISACA meetings strongly encouraged participation in Dallas Chapter committees also encouraged

32 IAEP Curriculum Mapped to Certifications Course Description Exam Prep: ACCT 6380 Internal Audit CIA ACCT 6336 Information Technology Audit and Risk Management CISA ACCT 6383 Fraud Examinations CFE ACCT 6386 Governance, Risk, and Compliance CRMA See degree-option-amp-courses for Other Courses

33 Attributes for Internal Auditors in the 21 st Century An often-asked question is what are the attributes needed for long term success in the internal audit profession? High Energy Level Receptive to Relocation Operations Knowledge Strong Academics Receptive to Change Experience Negotiation Skills Flexible Specialization Committed to Life long learning Written Communication Skills Self sufficient High Ethics and Integrity Oral Communication Skills Planning Receptive to Travel Good Problem Solver Organization Committed to Certification Project Oriented Judgment Time Management Career Oriented Bottom Line Orientation Systems Orientation Team Player Over achiever Customer Orientation Willingness to Participate Global Orientation Facilitation Skills Self awareness Avid Reader Low Maintenance (Yield) Ability to deal with ambiguity General Business Skills Creativity Role Performance Loyalty to Organization Decision Making X Factor (Synergistic) Self Motivated Personality Understanding of social norms Demonstrated Leadership Bilingual Performance Output Analytical Skills Positive Attitude Professional Development Professional Organizations

34 Key Contacts / Websites UTD IAEP Program: jindal.utdallas.edu/iaep Joseph Mauriello, Joseph.Mauriello@utdallas.edu Other Sites: UTD Student IIA Chapter: Dallas IIA Chapter: Fort Worth IIA Chapter: