The document discusses what internal audit departments and boards of directors need from each other. It outlines the audit committee's oversight roles in appointing internal audit leadership and approving audit plans. It also discusses how internal audit can provide assurance, insight, and objectivity to boards regarding governance, risk management, and controls. The document encourages internal audit to go beyond basic compliance audits by linking risks to business strategy, educating management, and providing advice and benchmarking insights to boards.

1. 1
60049935.1
What Board Directors Need from
Internal Audit
October 2, 2017
Lisa Greer Quateman, Esq.
POLSINELLI

2. 2
60049935.1
Audit Committee’s Role: Oversight
 Concur in the appointment of the chief audit
executive, evaluate that executive, protect the
reporting chain – functionally to the audit
committee and administratively to senior
management
 Approve the internal audit department charter,
planning and assessment process, annual audit
plan, scope of audits to be conducted

3. 3
60049935.1
 Per the American Institute of Certified Public
Accountants: “Ensure that the internal audit
department follows the Institute of Internal
Auditors International Standards for the
Professional Practice of Internal Auditing, and
maintains an effective quality assessment and
improvement program.”

4. 4
60049935.1
 The Audit Committee’s full plate includes
oversight of financial reporting, the financial
reporting process, the independent auditor, risk
management (financial and enterprise), ethics
and compliance

5. 5
60049935.1
 The Board’s role is to be knowledgeable about
the content and operation of the compliance
and ethics program and exercise reasonable
oversight with respect to implementation and
effectiveness of the compliance and ethics
program.

6. 6
60049935.1
 A director must attempt in good faith to assure
that a corporate information and reporting
system exists and is adequate to assure the
Board that appropriate information as to
compliance with applicable laws will come to its
attention in a timely manner in the ordinary
course of operations
 Board risk oversight of strategic, preventable
and external risks

7. 7
60049935.1
Defying Stereotypes about
Internal Audit
 Reactive not proactive
 Inadequate familiarity with the business
 “Sheriff” mentality
 Necessary evil
 Our mission: break out of these boxes

8. 8
60049935.1
The Basics
 Retrospective assurance based audits
 Focus on compliance with laws and regulations
 Quality assurance and improvement program
 Meeting standards
 Reliability of reporting and asset safeguards
 Budget, structure and size sufficient to meet
objectives
 The right balance between financial and
operational

9. 9
60049935.1
 Assurance
– Governance
– Risk
– Control

10. 10
60049935.1
 Objectivity
– Independence
– Accountability
– Integrity

11. 11
60049935.1
 Insight
– Analyses
– Assessments
– Catalyst

12. 12
60049935.1
Enhanced Basics
 Continually improve deliverables
 Avoid overlap
 Visualization tools
 Tight drafting
 Accelerate cycle time

13. 13
60049935.1
The Bells and Whistles
 Add value by going beyond the basics
 You have a 360 degree view of the organization
 Link financial, operational and compliance risks
to business strategy
 Report, and then provide advice, direction and
assistance
 Educate management and train the
organization

14. 14
60049935.1
 Top tool = risk identification and management
 You are the information conduit to the Board
 How is our business performing against
benchmarks? What are the pitfalls we should
be addressing? Do you see challenges to our
strategy? Ways to remove costs?

15. 15
60049935.1
 Enhance communications skills
 Leadership development
 Network with peers
 Industry expertise
 Pilot projects
 External benchmarking

16. 16
60049935.1
 Become expert in regulatory issues – existing
and proposed
 Look around the next corner, beyond the
obvious
 Anticipate
 “Brand” IA, with messaging, value proposition =
objectivity, insight, accountability

17. 17
60049935.1
 Innovate – rotational programs
 Robotic Process Automation
 Blockchain
 Data analytics
 Globalization and global systemic risks
 Supply chain

18. 18
60049935.1
Speaker Biography
 Lisa Quateman is a Principal in the Los Angeles office of national law firm Polsinelli. She served as the founding Office Managing Partner from inception in
2011 until early 2016. Lisa has specialized in real estate, financial services and international business matters for over thirty years. Concurrently and for
over twenty years, she has been CEO/Trustee of a trust which owns and operates industrial, retail, hospitality, and multi-family real estate in Los Angeles
County. Lisa is a seasoned corporate director, audit committee financial expert and trusted advisor to CEOs, recognized for her expertise in growing
revenues and managing enterprise risk, in addition to her industry acumen in real estate and financial services.
 Lisa is a member of the Board of Directors of Scherzer International Corporation where she serves on the Audit and Ethics Committee. She is Chair of the
Global Initiatives Council of the Los Angeles Area Chamber of Commerce, and is a Board of Directors and Executive Committee member. Lisa is an
Advisory Board member for the UCLA Ziman Center for Real Estate. She is the immediate past Vice Chair of the Board of Directors of the UCLA Alumni
Association, chairing the Nominating Committee and the Governance Committee, and was its General Counsel from 2014-2016. From 1998-2005 Lisa
was a public official as a member of the Board of Directors of the City of Los Angeles Industrial Development Authority, having been appointed and re-
appointed by former Mayors Richard Riordan and James Hahn.
 All of Lisa’s legal positions have involved extensive sales, marketing, risk management, and human resources development. Lisa is known for leading
successful complex transactions, particularly in the areas of infrastructure finance, industrial and retail real estate and matters involving governmental
entities and regulatory compliance. She is securities disclosure counsel for various State and local governmental agencies and a recognized expert and
frequent speaker on various finance topics. Earlier in her career, Lisa headed the corporate, real estate and tax group in the first U.S. office of
international law firm Dentons, and subsequently formed and built Quateman LLP, a boutique women-owned law firm that was acquired by Polsinelli.
 Lisa has received numerous awards and commendations from federal, state and local elected officials; business periodicals, and professional
organizations, including the Los Angeles Business Journal, Los Angeles Daily Journal, The American Lawyer, Commercial Real Estate Women Los Angeles,
and the Century City Chamber of Commerce.
 She is active with the National Association of Corporate Directors Southern California Chapter, where she is a founder of its Real Estate Board Roundtable,
and earned the Board Leadership Fellow Certification; and with Women Corporate Directors – Southern California. A graduate of UCLA School of Law,
Lisa received her Bachelor of Arts degree in French from UCLA, Phi Beta Kappa, Summa Cum Laude.

19. 19
60049935.1
For further information, contact:
Lisa Greer Quateman
Polsinelli LLP
Principal
2049 Century Park East, Suite 2900
Los Angeles, California 90067
310-556-1801 (Office)
310-203-5303 (Direct)
lquateman@polsinelli.com

20. 20
60049935.1
Polsinelli provides this material for informational purposes only. The material
provided herein is general and is not intended to be legal advice. Nothing
herein should be relied upon or used without consulting a lawyer to consider
your specific circumstances, possible changes to applicable laws, rules and
regulations and other legal issues. Receipt of this material does not establish
an attorney-client relationship.
Polsinelli is very proud of the results we obtain for our clients, but you should
know that past results do not guarantee future results; that every case is
different and must be judged on its own merits; and that the choice of a
lawyer is an important decision and should not be based solely upon
advertisements.
© 2017 Polsinelli PC. In California, Polsinelli LLP.
Polsinelli is a registered mark of Polsinelli PC