Transcript IIA General PowerPoint Template - Chapters Site

Say It Right
Presentation to IIA Granite State Chapter
9 May 2013
Phil Tarling
Chairman of the Global IIA Board
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Background to the Speaker
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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
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Agenda
Some Real Changes in the past decade
New Communication
The Internal Auditor –Communication & Understanding
Internal Auditing in the 20 Teens
Better Communication is the answer
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Some real changes in
the last decade
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Some real changes
The profession founded in 1941
With Europe at war -and
the rest of the world
not far off
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Some real changes…
The profession –
developing a new
look in the two
thousand and tens
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Some real changes…
From Clipboard
To Tablet
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Some real changes…
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Some real changes…
The Auditor with a Tablet
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Some real changes…
July 2012 – China Takes Second spot from Japan
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Some real changes…
The BRICS
announced the
setting up of the
bank, described as a
"BRICS-led SouthSouth development
bank."
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But one thing everyone has…
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The one common feature…
New
Communication
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New Communication
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New Communication…
This new communication is INFLUENTIAL
Egypt protests organised through Social Media
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New Communication…
This new communication BREAKS
BARRIERS…
Syria unrest shown to the world on YouTube
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New Communication…
The IIA’s very own AuditChannel.tv
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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
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New Communication…
The UK Prime Minister’s Web Site
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New Communication…
Communication will
help us shape the
future, not only in
countries but within
our companies
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Communication goes
across cultures, as
much in company
cultures as externally
Communication is
now instant so we
have to be ready for it
New Communication…
Communication comes in all shapes and sizes
Written
The written
word is still
persuasive
Verbal
A discussion
can lead to a
decision
Visual
Watching can
provide
insight
BUT they all rely upon being listened to
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New Communication
To be heard
You have to
have
listeners
And to know
who your
audience is
You have to
listen as
well
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Communication
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The Internal Auditor
Communication & Understanding
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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.
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The Internal Auditor & Communication…
We have moved on
Focussed on risk,
Determined to suggest solutions,
Not hiding behind independence,
Avoiding the sidelines
Involved in the organisation’s success or failure
Internal Audit is now a key part of the business
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The Internal Auditor & Communication…
We need to make sure that what we say:
not
only has an audience
not only that people are listening
But also that we
SAY IT RIGHT
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Internal Auditing
in the 20 teens
Getting to the Top Table
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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
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Getting to the Top Table
DIRECTION
Board of Directors/ Audit Committee
Senior Management
1st Line of Defence
ASSURANCE
3rd Line of Defence
2nd Line of Defence
Financial Control
Ethics & Legal
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Regulators
Enterprise Risk Management
External Audit
Quality
Internal Audit
Inspection
RISKS
CONTROL
Internal Control
COMPLIANCE
Operational
Management
Security
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
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Scaling Greater Heights
Business is Focused on Risks: Top 10 Business Risks in 2011
1.
Regulation and
Compliance
6.
Cost cutting
2.
Access to credit
7.
Non-traditional entrants
3.
Slow recovery or
double-dip recession
8.
Radical greening
4.
Managing talent
9.
Social acceptance and
Corporate Social
Responsibility
5.
Emerging markets
10.
Executing alliances and
transactions
Source: Ernst & Young Business Risk Report
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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
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Meeting Stakeholder Expectations:
Are we Being Honest With Ourselves?
“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…”
Audit
Committee
Executive
Management
Unacceptable
0.0%
0.4%
Poor
0.4%
1.9%
Acceptable
16.1%
25.9%
Good
57.6%
57.8%
Outstanding
25.9%
14.0%
Source: Emerging Trends and Leading Practices Spring 2011,
The Institute of Internal Auditors – Audit Executive Network
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The View from the Other Side:
Source: Ernst and Young Global Internal Audit Stakeholder Survey, November 2010 & January 2012
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Internal Audit should provide Insight
Source: Internal Audit Research Foundation Survey, March 2012
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Internal Audit frequently delivers Insight
Source: IIA Research Foundation Survey, March 2012
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My Internal Audit delivers Insight
Source: IIA Research Foundation Survey, March 2012
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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
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Ascending to the Level of A Trusted Advisor
Trusted
advisor
Compliance
function
Engaged but
not strategic
Relationships
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Communication is the answer
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Communication is the answer
We have to understand the messages
Do we know the language?
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Communication is the answer for IA
CAEs 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
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Communication is the answer
Messages are often coded
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Communication is the answer for IA
4.
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?
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Communication is the answer for IA
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Communication is the answer
Use
Simple
Words
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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
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Communication is the answer
9.
10.
Regularly communicate to senior management
and the board:
– Emerging risks facing the enterprise
– Systemic trends on risks and controls
gleaned from audit results
All the internal audit team need to be effective
communicators
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Thank you
Phil Tarling
Office: +441189208506
Mobile: +447802656986
Email: [email protected]
Twitter: @philtarling
www.globaliia.org