IMPACTFUL COMMUNICATION BETWEEN IA AND THE AUDIT COMMITTEE GOJ AUDIT COMMISSION CONFERENCE Oct-17
OBJECTIVES OF THIS PRESENTATION • To clarify governance • To discuss setting the right tone at the top. • To identify the roles of Audit Committee Members • To outline and clarify the value of Internal Auditing • To explore questions the Audit Committee should be able to answer 2 GOJ AUDIT COMMISSION CONFERENCE Oct-17
A NEW WORLD OF CORPORATE GOVERNANCE Boards of directors and committees must be: – Proactive – Informed – Investigative – Accountable 3 GOJ AUDIT COMMISSION CONFERENCE Oct-17
HERE & ABROAD BOARDS OVER THE YEARS HIT THE HEADLINES 4 GOJ AUDIT COMMISSION CONFERENCE Oct-17
CLARIFYING GOVERNANCE a system by which organizations are • directed and controlled includes the rules and procedures for • making decisions on corporate affairs to ensure success the stakeholders’ • interest 5 GOJ AUDIT COMMISSION CONFERENCE Oct-17
Effective Governance PARTNERS FOR EFFECTIVE GOVERNANCE 6 GOJ AUDIT COMMISSION CONFERENCE Oct-17
IA IS AT THE TABLE WITH YOU 7 GOJ AUDIT COMMISSION CONFERENCE Oct-17
FOR IMPACTFUL COMMUNICATION 8 Oct-17 GOJ AUDIT COMMISSION CONFERENCE
IA SUPPORTS YOUR ROLE • Oversight of financial reporting • Risk management • Internal control • Compliance • Ethics • Management • Internal auditors • External auditors 9 GOJ AUDIT COMMISSION CONFERENCE Oct-17
Audit committee members must maintain an in-depth understanding of IA best practices and how IA is functioning. COMMUNICATION = ASKING THE RIGHT QUESTIONS 10 GOJ AUDIT COMMISSION CONFERENCE Oct-17
Management, the board, and the audit committee all play critical roles in an organization’s tone at the top. IA RELIES ON YOU TO SET THE TONE AT THE TOP 11 GOJ AUDIT COMMISSION CONFERENCE Oct-17
Ensuring IA access to the audit committee, to encourage communication beyond scheduled committee meetings. 12 GOJ AUDIT COMMISSION CONFERENCE Oct-17
Six Group Of Question To Ask: • IA ROLE AND MANDATE • IA RELATIONSHIPS • IA RESOURCES • IA PROCESS • CLOSING QUESTIONS • AUDIT COMMITTEE ASSESSMENT ASK THE RIGHT QUESTIONS 13 GOJ AUDIT COMMISSION CONFERENCE Oct-17
COMMUNICATION MEANS UNDERSTANDING THE IA ROLE, MANDATE & IA RELATIONSHIPS Should we have an IA function? • What should our IA function do? • What should be the mandate of the IA • function? What is the relationship between IA and the • audit committee? 14 GOJ AUDIT COMMISSION CONFERENCE Oct-17
The IA Role In The AC’s Role in Governance Governance provides assurance on the Oversight of financial reporting organization’s governance, risk Risk management management and Internal control control processes Compliance to help the organization achieve Ethics its strategic, operational, financial, and compliance Management objectives . Internal Auditors External Auditors IA ARE YOUR INDEPENDENT, OBJECTIVE ARM 15 GOJ AUDIT COMMISSION CONFERENCE Oct-17
IA IS A cornerstone of strong governance, IA bridges the gap between • management and the board, assesses the ethical climate and the • effectiveness and efficiency of operations, and serves as an organization’s safety net • for compliance with rules, regulations, and overall best business practices. 16 GOJ AUDIT COMMISSION CONFERENCE Oct-17
REPORTING FUNCTIONALLY TO YOU = 17 INDEPENDENCE GOJ AUDIT COMMISSION CONFERENCE Oct-17
How is the IA function staffed? How does IA get and maintain the expertise it needs to conduct its assignments? Are the activities of IA appropriately coordinated with those of the external auditors? FIND OUT WHAT KEYS US GOING - IA 18 RESOURCES & IA PROCESS GOJ AUDIT COMMISSION CONFERENCE Oct-17
How is the IA plan developed? What does the IA plan not cover? How are IA findings reported? How are managers required to respond to IA findings and recommendations? What services does IA provide in connection with fraud? How do you assess the effectiveness of your IA function? FIND OUT WHAT KEYS US GOING - IA 19 RESOURCES & IA PROCESS GOJ AUDIT COMMISSION CONFERENCE Oct-17
UNDERSTAND THE KEYS STANDARDS; POSSIBLE OUTCOMES & PRIORITIES GOJ AUDIT COMMISSION CONFERENCE Oct-17
Does IA have sufficient resources? Does the IA function get appropriate support from the CEO and senior management team? Are you satisfied that this organization has adequate internal controls over its major risks? Are there other ways in which IA and the audit committee could support each other? Are we (the audit committee) satisfied with our IA function? IA RESOURCES IA PROCESS 21 GOJ AUDIT COMMISSION CONFERENCE Oct-17
reach a conclusion on the effectiveness of IA. use them to sum up discussions of audit relationships, resources and process with the chief audit executive in the presence of the CEO and external auditors. MAKE SOME CONCLUSIONS= CLOSING QUESTIONS & AUDIT COMMITTEE ASSESSMENT 22 GOJ AUDIT COMMISSION CONFERENCE Oct-17
WHAT IS INTERNAL AUDIT Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organization’s 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.” 23 Oct-17 GOJ AUDIT COMMISSION CONFERENCE
www.theiia.org Research/Publications Audit Committee Effectiveness: What Works Best Tone at The Top (corporate governance newsletter) The Professional Practices Framework The IIA Bookstore www.pwc.com/us/en/governance- insights-center/audit-committee- excellence-series.html www.global.corpgov.deliotte.com RESOURCE ARE WIDELY AVAILABLE 24 GOJ AUDIT COMMISSION CONFERENCE Oct-17
25 GOJ AUDIT COMMISSION CONFERENCE Oct-17
Simone Ramsay BSc., MSc, CIA, Vice President, Institute of Internal Auditors, Jamaica CIA Exam Trainer Audit Trainer Contact – 809-5339 Email – simknight06@gmail.com
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