IMPACTFUL COMMUNICATION BETWEEN IA AND THE AUDIT COMMITTEE GOJ - - PowerPoint PPT Presentation

IMPACTFUL COMMUNICATION BETWEEN IA AND THE AUDIT COMMITTEE

Oct-17

GOJ AUDIT COMMISSION CONFERENCE

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

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A NEW WORLD OF CORPORATE GOVERNANCE

Boards of directors and committees must be: –Proactive –Informed –Investigative –Accountable

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HERE & ABROAD BOARDS OVER THE YEARS HIT THE HEADLINES

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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

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PARTNERS FOR EFFECTIVE GOVERNANCE

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Effective

Governance

IA IS AT THE TABLE WITH YOU

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FOR IMPACTFUL COMMUNICATION

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IA SUPPORTS YOUR ROLE

• Oversight of financial

reporting

• Risk management
• Internal control
• Compliance
• Ethics
• Management
• Internal auditors
• External auditors

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COMMUNICATION = ASKING THE RIGHT QUESTIONS

Audit committee members must maintain an in-depth understanding of IA best practices and how IA is functioning.

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IA RELIES ON YOU TO SET THE TONE AT THE TOP Management, the board, and the audit committee all play critical roles in an

• rganization’s tone at the

top.

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Ensuring IA access to the audit committee, to encourage communication beyond scheduled committee meetings.

• IA ROLE AND MANDATE
• IA RELATIONSHIPS
• IA RESOURCES
• IA PROCESS
• CLOSING QUESTIONS
• AUDIT COMMITTEE ASSESSMENT

ASK THE RIGHT QUESTIONS

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Six Group Of Question To Ask:

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?

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IA ARE YOUR INDEPENDENT, OBJECTIVE ARM

The AC’s Role in Governance

 Oversight of financial reporting  Risk management  Internal control  Compliance  Ethics  Management  Internal Auditors  External Auditors

The IA Role In

Governance

 provides assurance on the

• rganization’s governance, risk

management and

 control processes  to help the organization achieve

its strategic, operational, financial, and compliance

• bjectives.

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• IA bridges the gap between

management and the board,

• assesses the ethical climate and the

effectiveness and efficiency of

• perations, and
• serves as an organization’s safety net

for compliance with rules, regulations, and overall best business practices.

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16 IA IS A cornerstone of strong

governance,

REPORTING FUNCTIONALLY TO YOU = INDEPENDENCE

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FIND OUT WHAT KEYS US GOING - IA RESOURCES & IA PROCESS

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?

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FIND OUT WHAT KEYS US GOING - IA RESOURCES & IA PROCESS

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?

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UNDERSTAND THE KEYS STANDARDS; POSSIBLE OUTCOMES & PRIORITIES

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IA RESOURCES IA PROCESS

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?

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MAKE SOME CONCLUSIONS= CLOSING QUESTIONS & AUDIT COMMITTEE ASSESSMENT

reach a conclusion on the effectiveness

• f 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.

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WHAT IS INTERNAL AUDIT

Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organization’s

• perations.

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.”

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RESOURCE ARE WIDELY AVAILABLE

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

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Simone Ramsay BSc., MSc, CIA,

Vice President, Institute of Internal Auditors, Jamaica

CIA Exam Trainer Audit Trainer Contact – 809-5339 Email – simknight06@gmail.com