Values and beliefs – an Internal Auditor to imbibe
<ul><li>‘ Values & beliefs’ are inner voice.  They are not mere statements. They drive  us from within and lead us to achi...
“ follow , adopt & imbibe” FOLLOW <ul><li>Go after  </li></ul><ul><li>Pursue </li></ul><ul><li>Track </li></ul><ul><li>Cha...
ADOPT <ul><li>Take on  </li></ul><ul><li>Accept </li></ul><ul><li>Implement </li></ul><ul><li>Embrace </li></ul><ul><li>Ad...
<ul><li>Drink </li></ul><ul><li>Down </li></ul><ul><li>Swallow </li></ul><ul><li>Take in </li></ul><ul><li>absorb </li></u...
<ul><li>Rules & Regulations  – Non-Compliance – penal action </li></ul><ul><li>Standards / Guidelines  – Better to follow ...
Proud of being an Internal Auditor <ul><li>“ There has probably always been a bit of inferiority complex among internal au...
<ul><li>Adhere to ethical norms </li></ul><ul><li>Provide value for money to customers </li></ul><ul><li>Treat people with...
<ul><li>Proactively involve in organisation’s concerns and progress efforts </li></ul><ul><li>Be ‘objective’ in approach <...
<ul><li>Functional Independence & Objectivity – Demonstrated by direct reporting at Top level </li></ul><ul><li>[ Philosop...
<ul><li>Strong linkages with the Global profession - Institute of Internal Auditors, Inc. </li></ul><ul><li>Audit Focus li...
<ul><li>Audit Structure should facilitate fulfilling the Internal Audit definition / objectives  </li></ul><ul><li>Vertica...
<ul><li>Combination of career Internal Auditors (who act as Change Agents) along with young professionals (who bring fresh...
<ul><li>Performance Parameters / measures – A must </li></ul><ul><li>Focussed Team Members Training – Soft skills & Functi...
Thank You
<ul><li>Independence </li></ul><ul><li>Attribute Standard 1100 </li></ul><ul><li>Internal Audit Activity should be ‘indepe...
<ul><li>Independence </li></ul><ul><li>Free from interference </li></ul><ul><li>No ‘influencing’ </li></ul><ul><li>No brak...
<ul><li>Objectivity </li></ul><ul><li>Impartial, unbiased attitude </li></ul><ul><li>Avoiding conflicts of interest </li><...
Head of Corporate Finance Manager (Internal Audit) Sr. Manager (Accounts) Sr.Manaer (Taxation) Etc.,
Head of Corporate Services Corp.Admin. Company Secretary Head of Finance Etc., Manager (Internal Audit) Manager (Secretari...
Head of Corporate Finance Company Secretary Sr.Manager (Taxation) Sr.Manager (Finance) Manager (Internal Audit)
CEO / MD Head of Audit Head of Corporate Finance Head of Corp.HR Audit Committee Chairman
Values & Beliefs (in Internal Audit) CEO may have too many direct reportees. Establishes Audit Status CEO <ul><li>Potentia...
Values & Beliefs (in Internal Audit) Executive may lack knowledge of operations and internal controls or may not have a mo...
<ul><li>If added responsibility </li></ul><ul><li>Time allocation </li></ul><ul><li>Priority setting for meetings </li></u...
<ul><li>Why Charter? </li></ul><ul><li>Understand & to allign IA charter with </li></ul><ul><li>the organisation ‘specific...
<ul><li>Thus it should be a joint agreement between executive management, internal auditing and the audit committee </li><...
ISO 9001 : 2000  How “Quality Management Principles” are getting addressed in our Division
Quality Management Principle 1 “ Customer Focused Organisation” Organisations depend on their customers and therefore shou...
Quality Management Principle 2 “ Leadership” Leaders establish unity of purpose and direction of the Organisation.  They c...
Quality Management Principle 3 “ Involvement of People” People at all levels are the essence of an organisation and their ...
Quality Management Principle 4 “ Process Approach” A desired result is achieved more efficiently when related resources an...
Quality Management Principle 5 “ System Approach to Management”: Identifying, understanding and managing a system of inter...
Quality Management Principle 6 “ Continual Improvement”: Continual Improvement is a permanent objective of the organisatio...
Quality Management Principle 6 “ Continual Improvement”: Continual Improvement is a permanent objective of the organisatio...
Quality Management Principle 7 “ Factual approach to decision making” Effective decisions are based on the analysis of dat...
Quality Management Principle 8 “ Mutually beneficial supplier relationships” Mutually beneficial relationships between the...
IIA Home page
<ul><li>Global organisation </li></ul><ul><li>Recongnised authority </li></ul><ul><li>Acknowledged leader </li></ul><ul><l...
<ul><li>Services, Programs & Products </li></ul><ul><li>Training </li></ul><ul><li>Certifications </li></ul><ul><li>Bench ...
<ul><li>PPF  </li></ul><ul><li>Code of Ethics </li></ul><ul><li>Standards </li></ul><ul><li>Practice Advisories </li></ul>...
Internal Audit redefined (by the Institute of Internal Auditors, Inc, USA – the International Body promoting the professio...
<ul><li>For managing the Audit Process </li></ul><ul><li>For diagnosis </li></ul><ul><li>For analysis </li></ul>Values & B...
Audit Functional Chart
Individual Attributes Required of Internal Auditors (to be an effective Internal Auditor)
Individual Attributes Required of Internal Auditors
Individual Attributes Required of Internal Auditors
Individual Attributes Required of Internal Auditors
14 ways to measure performance
14 ways to measure performance
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3a 1 Values And Beliefs

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3a 1 Values And Beliefs

  1. 1. Values and beliefs – an Internal Auditor to imbibe
  2. 2. <ul><li>‘ Values & beliefs’ are inner voice. They are not mere statements. They drive us from within and lead us to achieve our objectives with satisfaction. </li></ul><ul><li>In the context of IA, with these values , we become true professionals – without these we are mere technicians! </li></ul>Values & Beliefs (in Internal Audit)
  3. 3. “ follow , adopt & imbibe” FOLLOW <ul><li>Go after </li></ul><ul><li>Pursue </li></ul><ul><li>Track </li></ul><ul><li>Chase </li></ul><ul><li>“ precede” </li></ul>
  4. 4. ADOPT <ul><li>Take on </li></ul><ul><li>Accept </li></ul><ul><li>Implement </li></ul><ul><li>Embrace </li></ul><ul><li>Advocate </li></ul><ul><li>Promote </li></ul><ul><li>“ oppose” </li></ul>
  5. 5. <ul><li>Drink </li></ul><ul><li>Down </li></ul><ul><li>Swallow </li></ul><ul><li>Take in </li></ul><ul><li>absorb </li></ul>“ IMBIBE”
  6. 6. <ul><li>Rules & Regulations – Non-Compliance – penal action </li></ul><ul><li>Standards / Guidelines – Better to follow – some mandatory </li></ul><ul><li>some not </li></ul><ul><li>Best Practices – Awards, Appreciations, lead by </li></ul><ul><li>example, become pioneer </li></ul><ul><li>Values & beliefs – ‘Price’ that I would like to pay – </li></ul><ul><li>my own ‘conviction’! </li></ul>They are different !
  7. 7. Proud of being an Internal Auditor <ul><li>“ There has probably always been a bit of inferiority complex among internal auditors as to where they’re positioned and how people view them. That’s not right – we should be proud to be internal auditors “ </li></ul><ul><li>- William G.Bishop </li></ul>
  8. 8. <ul><li>Adhere to ethical norms </li></ul><ul><li>Provide value for money to customers </li></ul><ul><li>Treat people with respect and concern </li></ul><ul><li>Provide opportunities to learn, contribute and advance </li></ul><ul><li>Recognise & reward initiatives, innovativeness and creativity </li></ul><ul><li>Be part of the main stream always </li></ul>Basic Values & Beliefs [ in Internal Audit ]
  9. 9. <ul><li>Proactively involve in organisation’s concerns and progress efforts </li></ul><ul><li>Be ‘objective’ in approach </li></ul><ul><li>Have ‘independent’ state of mind </li></ul><ul><li>Believe in continuing professional education and sharing of best practices with co.professionals </li></ul><ul><li>Be a friend, philosopher & guide in the organisation </li></ul><ul><li>Tone at top, middle & Bottom! - Same voice from Internal Audit Team Members </li></ul>Basic Values & Beliefs [in Internal Audit ]
  10. 10. <ul><li>Functional Independence & Objectivity – Demonstrated by direct reporting at Top level </li></ul><ul><li>[ Philosophy of visibility of independence !] </li></ul><ul><li>Full time Internal Audit responsibility for the Leader – not an added responsibility </li></ul><ul><li>[ CIA is expected to breath IA all the time!] </li></ul><ul><li>Audit Charter – A must </li></ul><ul><li>[ Clarity for all ! ] </li></ul><ul><li>Philosophy of ‘Quality’ – Supported by Quality Certification </li></ul><ul><li>[ The World should see IA as a Quality symbol! ] </li></ul>Values & Beliefs (in Internal Audit)
  11. 11. <ul><li>Strong linkages with the Global profession - Institute of Internal Auditors, Inc. </li></ul><ul><li>Audit Focus linked with redefined Internal Auditing – Risk & Value Addition </li></ul><ul><li>Internal Audit Planning only based on Risk Assessment – Usage of scientific software tools / techniques </li></ul><ul><li>[ Belief in Professionalism! ] </li></ul>Values & Beliefs (in Internal Audit)
  12. 12. <ul><li>Audit Structure should facilitate fulfilling the Internal Audit definition / objectives </li></ul><ul><li>Verticals for indepth review and synergies across verticals. </li></ul><ul><li>Audit Skill Matrix – Entry, Middle & Senior level </li></ul><ul><li>[ Making intentions work! People competency ] </li></ul>Values & Beliefs (in Internal Audit)
  13. 13. <ul><li>Combination of career Internal Auditors (who act as Change Agents) along with young professionals (who bring fresh ideas) </li></ul><ul><li>Promotion of effective Guest Audit Pool – cross fertilisation of ideas </li></ul><ul><li>Minimum paper work for Audit Management – usage of software tools </li></ul><ul><li>[ Making intentions work – People competency] </li></ul>Values & Beliefs (in Internal Audit)
  14. 14. <ul><li>Performance Parameters / measures – A must </li></ul><ul><li>Focussed Team Members Training – Soft skills & Functional Skills </li></ul><ul><li>Effective facilitation role – a must </li></ul><ul><li>[Group Policy on ‘Internal Audit’ at the Apex level – Execution monitoring at Company level] </li></ul><ul><li>[Making intentions work – People Competency] </li></ul>Values & Beliefs (in Internal Audit)
  15. 15. Thank You
  16. 16. <ul><li>Independence </li></ul><ul><li>Attribute Standard 1100 </li></ul><ul><li>Internal Audit Activity should be ‘independent’ </li></ul><ul><li>Internal Auditors should be ‘objective’ in performing their work </li></ul>Values & Beliefs (in Internal Audit)
  17. 17. <ul><li>Independence </li></ul><ul><li>Free from interference </li></ul><ul><li>No ‘influencing’ </li></ul><ul><li>No brakes! </li></ul>Values & Beliefs (in Internal Audit)
  18. 18. <ul><li>Objectivity </li></ul><ul><li>Impartial, unbiased attitude </li></ul><ul><li>Avoiding conflicts of interest </li></ul><ul><li>‘ impaired’ in fact or appearance! </li></ul><ul><li>“ Disclosure” </li></ul>Values & Beliefs (in Internal Audit)
  19. 19. Head of Corporate Finance Manager (Internal Audit) Sr. Manager (Accounts) Sr.Manaer (Taxation) Etc.,
  20. 20. Head of Corporate Services Corp.Admin. Company Secretary Head of Finance Etc., Manager (Internal Audit) Manager (Secretarial) Manager (Legal)
  21. 21. Head of Corporate Finance Company Secretary Sr.Manager (Taxation) Sr.Manager (Finance) Manager (Internal Audit)
  22. 22. CEO / MD Head of Audit Head of Corporate Finance Head of Corp.HR Audit Committee Chairman
  23. 23. Values & Beliefs (in Internal Audit) CEO may have too many direct reportees. Establishes Audit Status CEO <ul><li>Potential conflict of interest: </li></ul><ul><li>If audit findings reflect badly on CFO </li></ul><ul><li>If resources are diverted to lower priorities </li></ul>Reinforces financial control CFO often understands the role of Internal Audit and can provide advice CFO Disadvantaves Advantages Reporting to
  24. 24. Values & Beliefs (in Internal Audit) Executive may lack knowledge of operations and internal controls or may not have a motivation for internal audit to be effective Good for audit independence if the executive has no or few direct operational responsibilities subject to significant internal audit scrutiny Other Senior Executive Internal audit is no longer seen as supporting and partnering with management. Chief Audit Executive may lose status and acceptance as a member of the management team Good for audit independence Chair of Audit committee Disadvantaves Advantages Reporting to
  25. 25. <ul><li>If added responsibility </li></ul><ul><li>Time allocation </li></ul><ul><li>Priority setting for meetings </li></ul><ul><li>Lack of ‘full’ & ‘exclusive’ attention </li></ul><ul><li>Lesser ‘attention’ to developmental needs of Internal Audit </li></ul><ul><li>Less ‘professionalism’ </li></ul>Values & Beliefs (in Internal Audit)
  26. 26. <ul><li>Why Charter? </li></ul><ul><li>Understand & to allign IA charter with </li></ul><ul><li>the organisation ‘specific culture’ </li></ul><ul><li>Expectations </li></ul><ul><li>Business objectives </li></ul><ul><li>Audit Committee’s charter </li></ul><ul><li>IIA’s standards relating to Audit Charter (Purpose, Authority, Responsibility) </li></ul>Values & Beliefs (in Internal Audit)
  27. 27. <ul><li>Thus it should be a joint agreement between executive management, internal auditing and the audit committee </li></ul><ul><li>Publicise the document! </li></ul><ul><li>Make it an educational tool! </li></ul><ul><ul><li>It grants auditors authority </li></ul></ul><ul><ul><li>It holds them accountable </li></ul></ul><ul><ul><li>It helps manage expectations & guides the practitioners in their mission to serve the organisation!!! </li></ul></ul>Values & Beliefs (in Internal Audit)
  28. 28. ISO 9001 : 2000 How “Quality Management Principles” are getting addressed in our Division
  29. 29. Quality Management Principle 1 “ Customer Focused Organisation” Organisations depend on their customers and therefore should understand current and future customer needs, meet customer requirements and strive to exceed customer expectations. <ul><li>Our Actions: </li></ul><ul><li>Involvement of auditees at the time of Audit Planning, </li></ul><ul><li>Execution & Report Presentations .Obtaining feedback </li></ul><ul><li>from Customers after each audit and incorporating </li></ul><ul><li>improvement suggestions in the Audit Processes. </li></ul><ul><li>Participation by CAE in Business Planning Meetings to </li></ul><ul><li>understand the customer needsInformalommunication/ </li></ul><ul><li>general feed back by CAE on a regular basis. </li></ul>
  30. 30. Quality Management Principle 2 “ Leadership” Leaders establish unity of purpose and direction of the Organisation. They create the internal environment in which people can become fully involved in achieving the organistion’s objectives. <ul><li>Our Actions: </li></ul><ul><li>Clearly laid down written Vision, Mission, Goals, </li></ul><ul><li>Charter, Responsibility Statement etc. Leaders’ regular </li></ul><ul><li>email ‘communication’ to team members.Championship </li></ul><ul><li>on different activities of the Division.Verticals to </li></ul><ul><li>achieve indepth audit with building synergy across </li></ul><ul><li>Verticals. Adopting IIA’s PPF Standards . </li></ul>
  31. 31. Quality Management Principle 3 “ Involvement of People” People at all levels are the essence of an organisation and their full involvement enables their abilities to be used for the organistion’s benefit. <ul><li>Our Actions: </li></ul><ul><li>Individual team members ‘Owning’ audit projects - </li></ul><ul><li>‘ Project Owners’ named. ‘Championship’ in different </li></ul><ul><li>areas of development. System that enables </li></ul><ul><li>ownership & authority at functional levels and need </li></ul><ul><li>based intervention by CAE on issues. </li></ul>
  32. 32. Quality Management Principle 4 “ Process Approach” A desired result is achieved more efficiently when related resources and activities are managed as a process. <ul><li>Our Actions: </li></ul><ul><li>‘ Process approach’ for audit execution by adopting the </li></ul><ul><li>Professional Practices Framework given by IIA, Inc. </li></ul><ul><li>USA. ‘WEBMARS’ effectively used as an enabler for the </li></ul><ul><li>above. GA , TA & SA (related resources ) effectively </li></ul><ul><li>interwoven to add value to the Business. </li></ul>
  33. 33. Quality Management Principle 5 “ System Approach to Management”: Identifying, understanding and managing a system of interrelated processes for a given objective contributes to the effectiveness and efficiency of the organisation. Our Actions: Each auditing process viz. Technical Audit, Systems Audit& General Auditing well integrated as a total system when delivering the final products to the internal customers for achieving effectiveness and efficiency. Audit Planning, Execution, Reporting & Knowledge Management interrelated in the Process SW WEBMARS’.Trying to bring Risk Asst. as a process which is a part of Audit System
  34. 34. Quality Management Principle 6 “ Continual Improvement”: Continual Improvement is a permanent objective of the organisation. <ul><li>Our Actions: </li></ul><ul><li>Monthly ‘Kaizen’ System introduced and being implemented . </li></ul><ul><li>Interaction / exchange of audit notes with audit professionals </li></ul><ul><li>from outside companies to adopt best practices. ( IFFCO, HCL </li></ul><ul><li>TECH. , Sundaram Clayton , KSFC,ITC). Our team planning </li></ul><ul><li>to visit Balrampur Chinny, Oberoi ) </li></ul><ul><li>Trying to build a strong internal library with materials on </li></ul><ul><li>World wide Internal Audit Best Practices </li></ul>Contd.
  35. 35. Quality Management Principle 6 “ Continual Improvement”: Continual Improvement is a permanent objective of the organisation. <ul><li>Our Actions: </li></ul><ul><li>Effective participation in external professional seminars to </li></ul><ul><li>improve knowledge. </li></ul><ul><li>Team members active involvement in Professional Bodies as </li></ul><ul><li>Leaders. [ Systems Auditor – ISACA, Tech. Auditor – </li></ul><ul><li>ENFUSE , Head of Audit – IIA ] </li></ul><ul><li>Adapted Skills Matrix- Birket et al 1999A for Auditors </li></ul>
  36. 36. Quality Management Principle 7 “ Factual approach to decision making” Effective decisions are based on the analysis of data and information. <ul><li>Our Actions: </li></ul><ul><li>Implementation of Customer feedback matrix </li></ul><ul><li>Quantification of audit benefits - Technical Audit </li></ul><ul><li>Volume of transactions , Value exposure , level of </li></ul><ul><li>decentralisation, employee turnover are all some of the data based </li></ul><ul><li>criteria in the risk based planning exercise. </li></ul><ul><li>Analysis of information regarding the support auditors </li></ul><ul><li>during evaluation of the right fit for the job. </li></ul>
  37. 37. Quality Management Principle 8 “ Mutually beneficial supplier relationships” Mutually beneficial relationships between the organisation and its supplier enhance the ability of both organisations to create value. <ul><li>Our Actions: </li></ul><ul><li>Criteria based selection process for support auditors </li></ul><ul><li>Continuous orientation of internal processes through </li></ul><ul><li>effective interactive meetings with these outside teams </li></ul><ul><li>Organising internal seminars with the external support </li></ul><ul><li>auditors as resource persons </li></ul><ul><li>Sharing knowledge / facilities such as Division’s Audit </li></ul><ul><li>Software tools </li></ul>
  38. 38. IIA Home page
  39. 39. <ul><li>Global organisation </li></ul><ul><li>Recongnised authority </li></ul><ul><li>Acknowledged leader </li></ul><ul><li>Principle educator </li></ul>Values & Beliefs (in Internal Audit)
  40. 40. <ul><li>Services, Programs & Products </li></ul><ul><li>Training </li></ul><ul><li>Certifications </li></ul><ul><li>Bench marking </li></ul><ul><li>Guidence </li></ul><ul><li>Technology </li></ul><ul><li>Educational products </li></ul><ul><li>Research foundation </li></ul>Values & Beliefs (in Internal Audit)
  41. 41. <ul><li>PPF </li></ul><ul><li>Code of Ethics </li></ul><ul><li>Standards </li></ul><ul><li>Practice Advisories </li></ul><ul><li>Development & Practice Aids </li></ul>Values & Beliefs (in Internal Audit)
  42. 42. Internal Audit redefined (by the Institute of Internal Auditors, Inc, USA – the International Body promoting the profession of Internal Auditing)   “ Internal Auditing is an Independent and Objective Assurance and Consulting Activity that is Guided by a Philosophy of Adding Value to Improve the Operations of the Organisation. It Assists an Organisation in Accomplishing the Objectives by Bringing a Systematic and Disciplined Approach to Evaluate and Improve the Effectiveness of the Organisation’s Risk Management, Control, and Governing Processes.”  
  43. 43. <ul><li>For managing the Audit Process </li></ul><ul><li>For diagnosis </li></ul><ul><li>For analysis </li></ul>Values & Beliefs (in Internal Audit)
  44. 44. Audit Functional Chart
  45. 45. Individual Attributes Required of Internal Auditors (to be an effective Internal Auditor)
  46. 46. Individual Attributes Required of Internal Auditors
  47. 47. Individual Attributes Required of Internal Auditors
  48. 48. Individual Attributes Required of Internal Auditors
  49. 49. 14 ways to measure performance
  50. 50. 14 ways to measure performance

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