“Demonstrating the Value of Internal Auditing to the Audit Committee”

June 25, 2014

CA. Nagesh Pinge

2

Change is Eternal

“WHAT GOT YOU HERE WON’T GET

YOU THERE”!-Marshall

Goldsmith

3

Changing Canvass

1) New Companies Act, 2013

2) Clause 49 amendments

3) Enhanced responsibilities of

Independent Directors

4) Anti Fraud Framework – Whistle

Blowing Mechanism

5) Risk Management Committee

6) Related Party Transactions

4

Challenges at the Cross Road

Great Opportunity to Reconnect Review & Reassess !!!!!

5

Laundry List of Things to Do

1) Engaging with stakeholders de-novo

a. Audit Committee

b. Top Management

c. Business Associates

d. Consolidating Subsidiaries

e. Statutory Auditors

f. Information Technology Service Providers

g. Your own Internal Audit Staff

h. Enhanced compliance requirements & regulatory norms

Cont’d…

6

Laundry List of Things to Do

2) Snap Shot review

a. Review of ‘existing Internal Audit Charter’

b. Review of Audit Plan Is it risk based? Is it ongoing as a concern? Are risks evaluated appropriately? Assessment of Resources – In-house,

Outsource or Co-source Extent of IT Audit coverage Audit Plan Budget

c. Assess the extent of “Brick & Mortar” Internal Auditing & “e-Internal” Auditing

Cont’d…

7

Necessity to realign with Stakeholder Priorities

Objectivity – IA should be objective in performing its work. Assurance – providing comfort over whether the control

environment is designed and operating effectively. Third line of defence – providing comfort that

management’s risk management and compliance functions are effectively monitoring the business.

Consulting – advising the business on how to improve processes and practices.

Risk management – offering insight into risk areas and the management of risk.

Governance – providing feedback on the effectiveness of governance processes.

Operational effectiveness and efficiency

8

Need of the hour!!!!!!!!!

Running a……..

LEAN -Efficient-Cost Effective-Agile & Proactive-Timely

MEAN -Daredevil-Not Personal-Focus on Audience

HUNGRY -Giving More for the less like it is said….“TATA INDICA V2 --More car per car”-Training & Development

.…Organization

9