The Essential Experience for CAEs - Audit Committee Need for Insight

412
-1

Published on

Presentation by Olivia F. Kirtley, CPA, CGMA at the 2014 General Audit Management Conference, March 24-26, 2014

Published in: Business, Technology
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
412
On Slideshare
0
From Embeds
0
Number of Embeds
4
Actions
Shares
0
Downloads
0
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide
  • ALSO different views on the value of IA among your “customers”Exec Mgmt 42%Board 79%Difference may be level of interaction & detail
  • In PwC 2013 Study – 8 Core IA Capabilities surveyed – asking how is IA doing in meeting expectations?5 – 50%-60% satisfied3 viewed as lagging - Improving QUALITY & INNOVATION (40%)Obtaining, training & sourcing TALENT (35%)Leveraging TECHNOLOGY (20%)
  • I WANT TO CLOSE - with quote by Alison Levine - led fist expedition of American women to climb MT Everest (READ)CAE – move forward by developing Team – support & inspire ELT – Business Units IA – move forward by supporting AC & business leaders – lead them in right directionAnd AC has responsibility too in supporting YOU –enabling you to move forward, in right direction as wellTogether we are all better – better equipped to Hang in there thru storms - Make tough decisions - Reach new heights – Fulfill our Mission THANK YOU for having me today – glad to take QUESTIONS
  • The Essential Experience for CAEs - Audit Committee Need for Insight

    1. 1. 2012 Gaming Conference April 11 – 13, 2012 / MGM Mirage / Las Vegas, NV, USA Click to edit Master subtitle style 2014 Gaming Conference April 14 – 16, 2014 / The Mirage / Las Vegas, NV, USA Audit Committee Need for Insight Olivia F. Kirtley, CPA, CGMA Audit Committee Chair U.S. Bancorp & Papa John’s Deputy President International Federation of Accountants
    2. 2. International Federation of Accountants (IFAC) Strengthening Organizations, Advancing Economies • Represents Global Accountancy Profession • 179 Member Bodies / Associates • 130 Countries • 2.5 Million Accountants • 4 International Standard Setting Boards • Independent Boards Supported by IFAC • 100+ countries adopted • 48 Language Translations
    3. 3. IFAC and IIA: MOU to Leverage Mutual Interests • Globally Advocate • Good Governance • Effective Risk Management • Strong Controls • Four Areas of Mutual Focus • Strong Audit Committee • Clear accountability of Risk & Controls • Properly Operating Controls • Adhering to Standards • Supporting IA as 3rd Line of Defense
    4. 4. Critical Players Financial Reporting Supply Chain Preparer Internal Audit External Audit Standard Setter / Regulator Audit Committee / Board of Directors Users of Financial Reports / Information
    5. 5. Audit Committee Role • Oversight • Control Environment & Financial Reporting • Risk Management (with full Board / other Committees) • Hiring/ Firing / Oversight - CAE & External Auditor • Credible Challenge, Healthy Skepticism • Accountability Framework - Significant Issues & Action Plans • Support Internal Audit - Needs & Position • Conduit between Board, Internal Audit and External Auditor
    6. 6. Internal Audit Role • Assist Audit Committee with Oversight Responsibility • Direct Communication & Reporting to Audit Committee • Assess Current, Emerging and Strategic Risks for Audit • Evaluate Effectiveness of Internal Controls & Risk Framework • Independent, Objective - 3rd Line of Defense • Match Skills & Resources to Current & Emerging Risks • Report Findings / Areas of Concern • Remediation Accountability & Follow up
    7. 7. Internal Audit Role: Great Expectations? • Who are Key Customers / “Buyers” of IA? • What should IA have more focus on? • Does IA have right people strategy to deliver on mission & objectives? • Evolving Skill Set Needs • People Skills • Business Acumen • Leadership • Various views & expectations of role IA plays • Perceptions of IA Performance & Value
    8. 8. Great Expectations: IA Customer? Audit Committee Audit Committee Management Operational Management Internal Audit 50% Audit Committee 50% Executive Management Source: Deloitte Study
    9. 9. 79% 42% 0 10 20 30 40 50 60 70 80 90 100 Board Members Executive Management Internal Audit Contributes Significant Value PwC 2013
    10. 10. 0 10 20 30 40 50 60 70 Leveraging technology Obtaining, training and/or sourcing talent Improving quality and innovation Delivering with a service-orientation Delivering cost-effective services Relationship with stakeholders Focusing on critical issues Aligning with stakeholder expectations Great Expectations: Three Capabilities Viewed Lagging
    11. 11. Great Expectations: Increasing Skill Needs? Audit Committee Business Insight Report Writing IT Data Analytics Communication ----- Project Management Management Business Insight Report Writing IT Data Analytics Communication Fraud Detection ---- Internal Audit Business Insight ---------- IT Data Analytics ---------- Fraud Detection Problem Solving Finance/Accounting Source: Deloitte Study
    12. 12. Great Expectations: Greater Focus by IA? Audit Committee Assurance IT Finance ----- ----- Management ------ IT ----- Advisory Operations Internal Audit ----- IT ----- Advisory Operations Source: Deloitte Study
    13. 13. What Do Audit Committees Worry About? Top 10 1. Global Expansion - Preparedness / Awareness / Integration 2. IT - Complexity / Cybersecurity 3. People – Relevant Skills / Talent / SMEs 4. Risk - ERM Built In or Bolted On? 5. Regulatory Issues – Pace of Change, Fragmentation 6. Resources – Potential Misalignment 7. Crowded Agenda – Increasing Demands 8. Overall Culture 9. Audit Quality – Internal and External 10. Keeping Pace
    14. 14. Expectations of CAE “License to Lead: Seven Personal Attributes” 1. Superior Business Acumen 2. Dynamic Communication Skills 3. Unflinching Integrity and Ethics 4. Breadth of Experience 5. Excellent Grasp of Business Risks 6. Gift for Developing Talent 7. Unwavering Courage Source: License to Lead (2010) Korn Ferry & IIA
    15. 15. CAE & AC Chair Communications Framework Pre-Meeting Calls Monthly Talks Quarterly 3-way meetings: CAE – ACC - CEO Available 24/7 As Needed
    16. 16. IIA Inspect , Inspire, Assure
    17. 17. INSPECT: People Are #1 Asset • KNOW THE BUSINESS • “Relevant” Talent • Vital for effectiveness (and respect) • Develop & Acquire • Diversity • Cultural Intelligence
    18. 18. INSPECT: Planning & Audit Quality • Heightened Expectations • “Satisfactory to Strong” Roadmap • Leverage Technology • Invest for Future – Coverage & Costs • Multi-Year Audit Plan vs. Risks and Vulnerabilities • Increasing & Emerging Risks • Serious Examination of Adequacy of Resources What would you do with 10% more ?
    19. 19. INSPECT: Potential Enhancements • People - Talent vs. Risks annual review • Transfer People In & Out for broader experiences • Guest Auditor Program (77% used in Forbes Insight/ E&Y study) • Audit Quality - Satisfactory to Strong Roadmap • Measure & Report Progress • Analysis - Root Causes, Implications Beyond Silos • On Site Time - Materiality not only measure • Risk Management –3rd Line of Defense • Broaden Awareness - Cultural Training • Be Resourceful - Get “Outside Your Four Walls”
    20. 20. INSPIRE: The Power of “And” • IA Comparative Advantage: Insights and Elevated Position • Uniquely positioned • Silver Lining of regulatory intervention - new management appreciation • Provide “Hindsight, Insight, Foresight” • Look Forward, Reach out, Give back • How & Why vs. What • Benefits of built in vs. bolt on • 80% think IA has room to improve & have positive impact on results (E&Y)
    21. 21. INPIRE: Potential Enhancements • Highlight key risks to achieving strategic objectives • traditionally very small % of audit plan / time • Help anticipate as business changes • Plain Language, not “audit speak” • Open-Ended Questions • Listen • Guest Auditor /Subject Matter Experts • Share winning practices from inside & outside company • Recognition Programs – “Customers” & IA Team
    22. 22. ASSURE: JOB #1 • Clearly outline Audit Plans & Risk Coverage •Depth & breadth of coverage ( SOX vs. full audit) • Not only what IS being done, but what is NOT being done •Approval of Plan Changes •Significant Findings •Repeat Issues •Action Plans & Timelines •Follow Up •Overall Culture
    23. 23. ASSURE: Culture “You all have heard of the ‘Tone at the Top’. I talk about the Tone at the Top, the Tune in the Middle and the Beat of the Feet at the Bottom.” Mervyn King, South Africa - Governance is King (2011)
    24. 24. ASSURE: Potential Enhancements • Focused Reporting • Executive Summaries • Why it Matters • vs. What it is • Trend Analysis • Follow up Matrix • Significant Findings & Action Plans • Executive (in camera) sessions • Periodic “Clean Sheet of Paper” Review
    25. 25. IIA: INSPECT, INSPIRE, ASSURE Audit Committee Needs for Insight • Focus on Audit Quality & Innovation • Right Size and Optimize Talent & Resources • Align Resources & Critical Risks • Build Trust & Deeper Relationships • “And” Provide Thought Leadership • Enable Success of Others • Enhance Reporting & Communications • Seek Candid Feedback on IA Knowledge & Performance
    26. 26. IIA: INSPECT, INSPIRE, ASSURE How can the Audit Committee help YOU? Support your Work Enhance your Position Champion your Value
    27. 27. Moving Forward “Everyone in an organization is responsible for helping to move forward with the mission, but in addition, every single employee/teammate/person must realize it is also their responsibility to look out for people on either side of them and help them move in the right direction as well.” Alison Levine, Team Captain -1st Everest expedition of American women

    ×