ALIGNING INTERNAL AUDIT WITH MANAGEMENT AND THE BOARD

Transcription

1 ALIGNING INTERNAL AUDIT WITH MANAGEMENT AND THE BOARD ASSURING YOUR WORK IS MEETING YOUR STAKEHOLDER S EXPECTATIONS IS VITAL TO SUCCESS IN OUR PROFESSION Charlie Johnson, CIA, QIAL, CGAP, CFSA LCRA General Auditor

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3 Our mission To enhance the quality of life of the Texans we serve through water stewardship, energy and community service.

4 What is LCRA?

5 Colorado River Largest river within Texas Almost 900 miles long LCRA manages lower two-thirds

6 The Highland Lakes

7 Floods and droughts

8 History of floods led to construction of dams LCRA formed in 1934 to take over work on unfinished dams Lyndon B. Johnson worked to expand LCRA s role to bring power to rural Central Texas Our history

9 LCRA lights up Central Texas

10 Coal, gas, wind and hydroelectric power Wholesale Power LCRA operates five power plants and six hydroelectric dams About 3,670 megawatts Enough electricity for about 1 million people

11 LCRA Transmission Services Corporation About 5,200 miles of transmission lines Nearly 400 substations

12 Parks and community services About 13,300 acres More than 40 parks, recreation areas, natural resource areas and river access sites Community Development Partnership Program awarded more than $42 million in matching grants

13 LCRA Auditing Services Team 13

14 LCRA Auditing Services Vision: Auditing Services is an integral, trusted advisor helping LCRA succeed. Mission: Auditing Services provides objective assurance to LCRA on governance, risk and control practices critical to the organization s future success. 14

15 And now a word from our sponsors Free lunch. and an adult beverage Earn CPEs and enhance your professional knowledge Network with peers. and have a little fun! Help keep our Austin IIA Chapter Platinum ** Must be a Certified Internal Auditor** 15

16 Examples of Stakeholders 16

17 Are These Stakeholders? 17

18 Lost Boys,

19 2016 LCRA Board of Directors 19

20 2006 LCRA Board of Directors 20

21 LCRA Executive Team 21

22 Internal Audit Stakeholder Expectations 2011 CBOK Stakeholder Board Executive Value Expectations Assurance and no surprises / eyes and ears Assurance, value for money / management tool Line Management Help, controls assurance, recommendations / management control Internal Audit Staff External Audit Regulators Community Shareholders Career, development, exposure, making a difference, WIFM Combined assurance, information sharing / substantive testing Objective opinion, peace of mind / investigations Social responsibility, protecting the economy Value protection, whistleblowers 22

23 Voice of the Customer Stakeholders Messages for Internal Audit CBOK Know the business of the organization. 2. Assurance is assumed. 3. Best practices when providing assurance. 4. Building on assurance. 5. Coordinate with the second line of defense. 6. Effective IA structure and relationships. 23

24 Charlie Johnson s Stakeholder Recipe Six month audit plans: Informed from regular conversations and input from executives (and approved and discussed 2x annually with the audit committee) Primarily oriented to the organization s strategies and mitigations on the key risk register Keep audit universe, COSO and other audit jargon/concepts to ourselves (but don t ignore them). 24

25 Charlie Johnson s Stakeholder Recipe Show/practice your commitment to the organization: Use the same risk language/framework adopted by management Increase non-audit employee interactions Show up and participate as employees and managers at all organization meetings/functions Recognize that not every solution is an audit. 25

26 Charlie Johnson s Stakeholder Recipe Keep Board s view of organization front and center: Attend/monitor all board and committee meetings. Commit to regular 1-1 visits with directors Create informal opportunities to visit and learn Read what they are reading Newsclips, board books, professional journals 26

27 Charlie s Personal Pillars Understand your strengths, weaknesses, values and worldviews Habit of continuous self-reflection and learning. Be aware of unhealthy blind spots or weaknesses. 27

28 Charlie s Personal Pillars Engage others with a positive, caring attitude Create environments bound and energized by loyalty, affection and mutual support. Commit to honoring and unlocking each person s endowments and potential. 28

29 Charlie s Personal Pillars Energize self and others through bold ambitions Imagine an inspiring future and strive to shape it rather than passively watching. Extract gold from the opportunities at hand rather than waiting for golden opportunities to be handed to you. 29

30 Charlie s Personal Pillars Confidently innovate and adapt to embrace a changing world Anchored by nonnegotiable principles and values Indifference that allows exploration of new ideas and approaches 30

31 10 Core Principles (anchors) 1. Demonstrate integrity Embody your personal beliefs system at work 2. Demonstrates competence and due professional care. 3. Is objective and free from undue influence. Recognize that our objectivity is the heart of our value proposition Have a life and friends outside of work 4. Aligns with the strategies, objectives, and risks of the organization. 5. Is appropriately positioned and adequately resourced. Advocate for change if needed and/or work elsewhere 31

32 10 Core Principles (anchors) 6. Demonstrates quality and continuous improvement. I am never done learning how to be a better auditor 7. Communicates effectively Use the organization s risk and control language 8. Provides risk-based assurance. Starting from a controls perspective is dead 9. Is insightful, proactive and future-focused. 10. Promotes organizational improvement. Put the success of the organization first 32

33 Thank You! Ask Me Anything! Charlie Johnson Interested in Austin Test Development Team?: Nicole Rhyne