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Webinar: Evolve Beyond the Third Line
The document discusses the current challenges faced by internal audit teams, such as a rapidly changing risk environment and static audit plans, and suggests that the integration of internal audit and governance, risk, and compliance (GRC) can help overcome these challenges. It emphasizes the need for more agile and risk-driven audit processes, leveraging data analytics, and enhancing visibility and reporting. The ultimate goal is to evolve beyond traditional practices to improve effectiveness and collaboration across organizations.
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Webinar: Evolve Beyond the Third Line
- 1. EVOLVE BEYOND THE THIRDLINE INTEGRATING AUDIT & RISK FOR GREATER AGILITY, VISIBILITY & EFFECTIVENESS
- 2. PANELISTS Patrick Potter GRC Strategist RSAArcher @pnpotter1017 Kirk Hogan COO Iceberg Networks @KW_Hogan Moderator: Glen Gower, Iceberg Networks
- 3. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan AGENDA 1What are today’s IA challenges? 2 Why do these challenges exist? 3 How can we evolve?
- 4. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan 1.TODAY’S INTERNAL AUDIT CHALLENGES • Rapidly changing risk environment • Audit teams are slow, audit plans are static • Audit engagements are past-looking (vs. forward looking) • Limited budget & resources • Compliance-driven vs. risk-driven
- 5. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan WHATPOSES THE GREATEST CHALLENGE? Source: KPMG’s Audit Committee Institute –“Is Everything Under Control?” 2017 Global Audit Committee Pulse Survey 41% Effectiveness of the risk management program 34% Legal/regulatory compliance 28% Managing cyber security risks 28% Maintaining the control environment 24% Tone at the top & organizational culture
- 6. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan HOWCAN INTERNAL AUDIT MAXIMIZE VALUE? Source: KPMG’s Audit Committee Institute –“Is Everything Under Control?” 2017 Global Audit Committee Pulse Survey 56% Expand audit plan on key areas of risk (e.g. cyber, operational, technology) 53% Maintain flexibility in the audit plan 49% Expand the audit plan on effectiveness of risk management processes
- 7. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan 2.WHY DO THESE CHALLENGES EXIST? • Industry inertia • External auditor & regulator expectations • IA independence challenge • Heavy regulatory burden
- 8. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan 3.HOW CAN WE EVOLVE? ü Integrate IA + GRC ü Leverage the 2nd Line of Defense ü Dynamic / Agile risk-driven audit plans ü Continuous control monitoring ü Data Analytics
- 9. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan WHATIS INTEGRATED GRC? Business Continuity Management Vendor Risk Management Enterprise Legal Management IT Risk Management Corporate Compliance Audit Management Operational Risk Management Integrated risk management… recognizes the interconnected nature of operational risk across an enterprise
- 10. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan 1stLine of Defense 2nd Line of Defense 3rd Line of Defense LEVERAGE THE 2ND LINE OF DEFENSE Adapted from ECIIA/FERMA Guidance on the 8th EU company Law Directive, article 41 Management Controls Internal Control Measures Internal Audit Financial Control Security Risk Management Quality Inspection Compliance Senior Management Governing Body / Board / Audit Committee ExternalAudit Regulator
- 11. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan AGILITY (PWC2017 State of the Internal Audit Profession Study) “To meet business expectation, Internal Audit needs to be able to execute more agile audits. Speed and flexibility are key– getting the work done and reported quickly; less of audits running on for weeks.” –Mike Taylor, Head of Global Internal Audit, Experian plc
- 12. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan AGILITY Source:CBOK Practitioner Survey, 2015 63% of CAEs update audit plans no more than twice per year 15% have ‘highly flexible’ plans 31% don’t update risk assessments 21% deploy continuous risk assessments
- 13. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan BENEFITSOF AGILE IA Source: PWC 2017 State of the Internal Audit Profession Study 73% change course and evaluate risk at the speed required by the business 63% have increased the frequency of audit plan development and modification 47% Have increased the use of data mining & data analytics for continuous monitoring of trends and potential impacts of disruption
- 14. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan VISIBILITY& REPORTING Source: Deloitte’s Global Chief Audit Executive Survey, 2016 Static Word Processing Reports Static Presentations Dynamic Visualization Tools Dynamic Analytics Tools How will you communicate – today vs. future? Today Future
- 15. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan RECAP:INTERNAL AUDIT CHALLENGES • Rapidly changing risk environment • Audit teams are slow, audit plans are static • Audit engagements are past-looking (vs. forward looking) • Limited budget & resources • Compliance-driven vs. risk-driven
- 16. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan Risk-based audit (prioritization) Moreefficient audit process Fewer workarounds Visibility & reporting (metrics, stats) Enable “self-serve” Tracking of issues & findings Integrate functions – audit, compliance, risk Address regulator findings re: process A GRC SOLUTION FOR AUDIT
- 17. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan RSAARCHER IT and Security Risk Management Third Party Governance Audit Management Regulatory and Corporate Compliance Management Business Resiliency
- 18. Patrick Potter @pnpotter1017 Kirk Hogan @KW_Hogan BENEFITSOF AUDIT + GRC Cross business lines & organizational boundaries for Collaboration Define & enforce risk ownership through Accountability Automate processes for Efficiencies Consolidate data and enable risk Analytics & Visibility
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- 20. EVOLVE BEYOND THE THIRDLINE THANK YOU! icebergnetworks.com/audit-webinar info@icebergnetworks.com • 855-595-0808 x261