View
223
Download
0
Category
Tags:
Preview:
Citation preview
www.globaliia.org
Say It Right
Presentation to IIA Granite State Chapter 9 May 2013
Phil TarlingChairman of the Global IIA Board
www.globaliia.org
Vice President, IA Centre of Excellence, Huawei Chairman - Global IIA Immediate Past President of the ECIIA (2010-2011) Past President of the IIA UK and Ireland (2005-06) Provided Capacity building in Internal Audit & PIFC since 1998 Worked in the UK, Estonia, Latvia. Lithuania, Poland, Hungary,
Czech Republic, Kenya, South Africa, Romania, Macedonia, Croatia, Serbia, Kosovo and Turkey
Now responsible for developing internal audit capacity in a worldwide Chinese owned telecoms company
Background to the Speaker
www.globaliia.org
AgendaSome Real Changes in the past decade
New Communication
The Internal Auditor –Communication & Understanding
Internal Auditing in the 20 Teens
Better Communication is the answer
www.globaliia.org
Some real changes
The profession - founded in 1941
With Europe at war -and the rest of the world not far off
www.globaliia.org
Some real changes…
The profession – developing a new look in the two thousand and tens
www.globaliia.org
Some real changes…
The BRICS announced the
setting up of the bank, described as a
"BRICS-led South-South development
bank."
www.globaliia.org
New Communication…This new communication is INFLUENTIAL
Egypt protests organised through Social Media
www.globaliia.org
New Communication…This new communication BREAKS BARRIERS…
Syria unrest shown to the world on YouTube
www.globaliia.org
New Communication…
Social Media is being used for internal audit Professional Development and Enhancement
In the first 6 months, AuditChannel.tv had 3.2M hits
Is anyone still saying that Social Media is not important?
Our companies aren’t, nor is government
www.globaliia.org
New Communication…
Communication will help us shape the future, not only in
countries but within our companies
Communication goes across cultures, as much in company
cultures as externally
Communication is now instant so we
have to be ready for it
www.globaliia.org
New Communication…Communication comes in all shapes and sizes
BUT they all rely upon being listened to
WrittenThe written word is still persuasive
VisualWatching can provide insight
VerbalA discussion can lead to a
decision
www.globaliia.org
New Communication
To be heard You have to
have listeners
And to know who your
audience is
You have to listen as
well
www.globaliia.org
The Internal Auditor -Communication
This is not new to Internal Auditors
Communication has always been a soft skill that auditors have developed, through reporting style and listening
But previously Internal Audit had a bad reputation.
www.globaliia.org
The Internal Auditor & Communication…We have moved onFocussed on risk,Determined to suggest solutions,Not hiding behind independence,Avoiding the sidelinesInvolved in the organisation’s success or failure
Internal Audit is now a key part of the business
www.globaliia.org
The Internal Auditor & Communication…We need to make sure that what we say:
not only has an audiencenot only that people are listening
But also that we
SAY IT RIGHT
www.globaliia.org
Getting to the Top Table Football managers often say that for the goalkeeper to miss a save, 10 other players must have missed
it before him. This third line role likens internal audit to that of a goalkeeper in a football match. When the ball is lost in midfield (first line) and the
defence (second line) fails to pick up the opposition’s attack, it is left to the goalkeeper (third line) to save
the day. There is a reasonable expectation that internal audit will identify the
weaknesses in both first and second lines and failure to do so may lead
to significant loss to the organisation.
1st line:Business
Management
2nd line:Risk Mgt /
Compliance / Others
3rd line:Risk Based Internal
Audit
External Audit and the Regulators are the Referee and Linesman
www.globaliia.org
Board of Directors/ Audit Committee
Senior Management
Operational
Managem
ent
1st Line of Defence 2nd Line of Defence 3rd Line of DefenceExternal Audit
Regulators
Quality
Security
Enterprise Risk Management
Financial Control
Inspection
Ethics & Legal
Internal Control
Internal Audit
Getting to the Top Table DIRECTION
ASSURANCE
COM
PLIANCE
CON
TROL
RISKS
www.globaliia.org
Getting to the Top Table
The third line of Defence provides the outlet to the Audit Committee and Board
But the seat is not a vacant seat for the CAE to walk into
The seat at the Top Table has to be earned
www.globaliia.org
Scaling Greater HeightsBusiness is Focused on Risks: Top 10 Business Risks in 2011
Cost cutting
Non-traditional entrants
Radical greening
Social acceptance and Corporate Social
Responsibility
Executing alliances and transactions
Regulation and Compliance
Access to credit
Slow recovery or double-dip recession
Managing talent
Emerging markets
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Source: Ernst & Young Business Risk Report
www.globaliia.org
Risk Based Internal Audit
RBIA is not about identifying the Process Risk in the organisation
Risk Based Internal Auditing (RBIA) is a methodology that links internal auditing to an organisation’s overall risk management framework.
RBIA allows internal audit to provide assurance to the board that risk management processes are managing risks effectively, in relation to the risk appetite
www.globaliia.org
Meeting Stakeholder Expectations: Are we Being Honest With Ourselves?
Audit CommitteeExecutive
ManagementUnacceptable 0.0% 0.4%
Poor 0.4% 1.9%
Acceptable 16.1% 25.9%
Good 57.6% 57.8%
Outstanding 25.9% 14.0%
“If surveyed today on how well internal auditing is meeting its needs and expectations, my audit committee/executive management would probably rate their overall satisfaction…”
Source: Emerging Trends and Leading Practices Spring 2011, The Institute of Internal Auditors – Audit Executive Network
www.globaliia.org
Source: Ernst and Young Global Internal Audit Stakeholder Survey, November 2010 & January 2012
The View from the Other Side:
• Internal Audit needs improvement
• Improvement needs to be within 24 months
2010• 74%• 96%
2011• 80%• 70%
www.globaliia.org
Source: Internal Audit Research Foundation Survey, March 2012
Internal Audit should provide Insight
• Board Members• Executives• CAE
Agree/Strongly Agree
• 86%• 89%• 90%
www.globaliia.org
Source: IIA Research Foundation Survey, March 2012
Internal Audit frequently delivers Insight
• Board Members• Executives• CAE
Agree/Strongly Agree
• 61%• 38%• 66%
www.globaliia.org
My Internal Audit delivers Insight
• Board Members
• Executives• CAE
My Internal Audit
• 79%
• 56%• 81%
In general Internal Audit
• 77%
• 57%• 72%
Source: IIA Research Foundation Survey, March 2012
www.globaliia.org
Provide Insight
Insight should come through linking IA through RBIA with Risk Management and Governance in the organisation
Meet our Stakeholders’ expectations we need to ensure that we do what it is they want us to do
Educate the Stakeholders in what we can do
www.globaliia.org
Ascending to the Level of A Trusted Advisor
Relationships
Competence Capable but
poorly aligned
Compliance function
Engaged but not strategic
Trusted advisor
www.globaliia.org
Communication is the answer
We have to understand the messagesDo we know the language?
www.globaliia.org
Communication is the answer for IACAEs need to :
1. Listen to what the Board are saying directly and through the Audit Committee
2. Listen to what the senior executives are saying
3. Understand what the messages are
www.globaliia.org
Communication is the answer for IA4. Make sure that what you are saying is to the
right people» Be careful of the “Reply All” button
5. Make sure that your communication is clear» Are your reports concise and in plain
language» Is it what you want to say?
www.globaliia.org
Communication is the answer 6. Get a name as the “Advisor” to the Board and
Audit Committee; the “go to” person for business advice
7. Have regular informal interaction with the Audit Committee members and the Chairman
8. Go beyond just reporting audit results; be part of the business discussing business issues with senior Executives
www.globaliia.org
Communication is the answer 9. Regularly communicate to senior management
and the board:– Emerging risks facing the enterprise– Systemic trends on risks and controls
gleaned from audit results10. All the internal audit team need to be effective
communicators
www.globaliia.org
Thank you
Phil Tarling
Office: +441189208506Mobile: +447802656986
Email: phil.tarling@huawei.comTwitter: @philtarling
Recommended