Audi-Wire December 2014 - The Institute of Internal Auditors

December 2014
 ANNIVERSARY W EEK
FACILITATORS .................... 2


 TRANSFORM INTERNAL
AUDIT ’S IMAGE ................... 3


 QUICK TIPS CORNER ...... 4


 CHAPTER EVENTS .......... 5


 ANALYTICS REFRESHER .. 6


 YOU ARE CREATIVE ........ 7


 CAE CORNER ................ 8
Audi-Wire
DECEMBER
1
2014
Audi Wire
THE INSTITUTE OF INTERNAL AUDITORS
TRINIDAD & TOBAGO CHAPTER NEWSLETTER
IIA Anniversary Week 2014
The Local Chapter of The
Institute of Internal Auditors
hosted its anniversary training
week themed “Enhancing &
Strengthening
Your
Professional Capabilities” from
September 8-12, 2014 at the
Arthur Lok Jack Graduate School
of Business.
The seminars were well attended
by
approximately
130
participants;
some
of
the
seminars were full to capacity.
The participants represented a
broad range of organisations in
both public and private sectors. The seminar was opened by the
President, Camille CumberbatchDhoray, who gave an excellent
introduction and overview of the
IIATT. She discussed not only
some initiatives of the IIATT, but
also
emphasised
several
important issues, such as raising
awareness especially among the
board level and the need for
continued education and training
of the Chapter’s professional
membership.
The other presentation on the first
day offered a legal perspective on
Contract
Management
and
Administration. Ronnie Bissessar
presented on the fundamentals of
contract law relating to both
construction and commercial
contracts
and
provided
a
discourse on best practices
associated with risk mitigation.
Arbitration
and
Dispute
resolution was heavily discussed.
Based on an increasing awareness
of
the
draft
procurement
legislation currently before the
Parliament of Trinidad and
Tobago, much dialogue was
undertaken on this highly topical
area.
On day two of this particular course,
Margaret Ann DePeza emphasised the
importance of having the right contract
in place, the criticality of PreQualification and contractor registration
(Continued on page 2)
December 2014
Audi-Wire
2
(Continued from page 1)
and well as she explored techniques to secure, monitor and enforce contract performance . In summarising she
espoused that properly executed contracts provide not only a framework for legal relations but also the basis and
reference point for any engagement entered into hence its importance in relation to risks management.
The 9th and 10th saw Claire Gomez Miller presenting on the Three lines of Defence for Effective Governance, Risk
Management, Controls and Compliance. She introduced participants to the roles and responsibilities of the Audit
Practitioner, Risk Manager, Chief Officers, Management and Board in risk management and governance.
Areef Ali presented MS Excel Data Mining and Data Analytics- Business Improvement Tools and Techniques for
Auditors on the 10th and 11th September 2014. Areef honed in on the use of data tables, pivot tables, power queries
and other data visualization techniques to enhance audit scope objectives and to elaborate findings effectively in a
cost effective format.
Closing off the week was Stephen McClashie who spoke on Inventory and Materials Management. Effective and
Best practice inventory Management and Control Systems were defined, red flags of possible Internal Fraud was
explored and methods for measuring productivity and performance were elaborated amongst other critical areas.
-by Professional Development Subcommittee IIA-TT Chapter
A special thank you to all our facilitators!
Mr. Ronnie Bissessar Mr. Areef Ali Ms. Margaret Ann DePeza Mr. Stephen McClashie Mrs. Claire Gomez‐Miller December 2014
Audi-Wire
3
5 Bold Steps to
Transform Internal
Audit's Image
insight and foresight – not
just hindsight. When I finish
delivering my message, the
question is invariably asked:
"How do I start?"
Over the years, I have
addressed many internal audit
audiences around the world
on the importance of aligning
with stakeholder
expectations. I often close my
message by encouraging
chief audit executives (CAEs)
and internal auditors to shed
the image of fault-finder and
traffic cop (images for which
too many suffer), and become
trusted advisors who provide
The first steps in
transforming an internal
audit department's image can
be crucial. A false start, or
one that is perceived as
insincere, can render any
efforts that come afterward
as downright fruitless. If
management and boards
have come to perceive
internal audit as a traditional
"control assurance shop," it's
1. Forge a strategic vision for change.
Transformation must be preceded by commitment. An informal or ad hoc decision
by the CAE and staff to transform internal
audit can result in a directionless effort. A
formal strategic plan should embrace the
need and desire to change. Aspirations and
expectations of stakeholders should be
solicited and form the basis for this vision.
Of course, if stakeholders are not enlightened to internal audit's potential value,
their expectations will likely be constrained. The conversation must be open
and candid, and internal auditors must
have a thick skin if the assessment of current performance in not flattering. Open
stakeholders' eyes to emerging practices in
the internal audit field before you settle on
the direction internal audit will take to
address their needs.
2. Invest in relationships.
The most critical component of "trusted
advisor" is trust, and trust depends on a
solid relationship. The CAE cannot alone
build and sustain relationships. The entire
internal audit team must be invested in the
process. What gets measured gets done, so
craft departmental and individual performance metrics around organizational relationships.
hard to open their eyes to the
potential value that internal
audit can add – particularly
without a change of internal
audit leadership and/or staff.
But personnel change is not a
prerequisite to transforming
internal audit's image in an
organization. I have seen
many internal audit functions
take bold and decisive steps
to successfully rebrand their
departments in the eyes of
stakeholders.
Here are five steps I've
identified to bring successful
transformation:
3. Expand the emphasis of internal audit reports.
No transformation will get very far when
limiting the emphasis to strategy. Ultimately, it is the tactical initiatives that will
define its success. One place where internal audit departments can make real progress is in the transformation of reporting.
Too many internal audit reports remain
focus on negative results from the past.
Assurance should be accompanied by insight. I encourage internal auditors to open
their audit reports with an overview of
management's accomplishments – observations on strong practices or results. Once
a proper tone has been set, we can share
findings and recommendations for improvements in a non-accusatory and constructive manner. Finally, I suggest closing
the report with an appendix of corporate or
industry leading practices for management's consideration. While all of this may
not sound very transformational, it signals
a different approach that management will
appreciate, and audit committees will find
constructive.
4. Connect the dots.
One of the most common concerns of audit committee members is that internal
audit is reluctant to summarize its body of
work in a "what does it all mean" way.
A BOUT THE
A UTHOR :
Richard
Chambers
Richard F. Chambers, CIA,
QIAL, CGAP, CCSA, CRMA,
is president and CEO of The
IIA. In his blog, he shares his
personal reflections and insights based on his nearly 40
years of experience in the
internal audit profession.
Some call this "connecting the dots." In
other words, if internal audit has issued 30
internal audit reports over the past year,
how well controlled do they believe the
company is? Some refer to these as opinions on the overall effectiveness of controls or risk management. Whatever it is
called, it ultimately provides insight. Such
assessments/opinions can prove valuable
to management and the board. Naturally,
we must qualify such opinions or assessments based on the overall scope of our
work, but don't underestimate the value
they provide to stakeholders.
5. Continuously back up words with
deeds.
I have offered two bold strategic moves
and two tactical ones often seen in internal
audit transformational initiatives. Whether
your strategy aligns with these, there is
one overarching imperative that will define success or failure. Chief audit executives and their staff must take a long-term
view of transformation and continuously
back up words with deeds. The temptation
to slide back into a traditional mode will
always be present. But once a course is set,
stick to it. Be the agent of change in your
department that you will recommend for
others.
December 2014
Audi-Wire
4
Q UICK T IP C ORNER
E-mail Tips
by: Rajin Ramjit
Thanks to all who attended the 3rd chapter meeting on October
28th held at the President's Box QPCC where presenters Mr.
Malcolm Reid and Mrs. Jamie Sanderson-Reid spoke on business
continuity, security and operational risk management. It was an
enlightening and interactive session. A sincere thanks to Brison
Limited for their presentation. We would also like to extend
thanks to Management Control Systems Limited for their
sponsorship and support of this chapter meeting.
1. First Impression - The Subject Line
Your subject is your first impression to your
reader. Ensure that you subject gives the reader a
reason to open your message.
Do's: "Team Meeting at 10am tomorrow"
Don'ts: "Meeting" or "Read NOW!!!"
2. Proofread
Many of us have quickly sent an email with a
tiny error that causes us to have to resend an
email to correct the situation. Or perhaps
received and e-mail with an error which requires
responding to get the correct information. Take a
couple minutes to proofread your e-mail
checking for spelling, grammar, punctuation and
ensure that it contains correct information. Also,
don't assume your email cannot be read by an
unintended person. IT departments and hackers
can read your emails. E-mail is a written record
of something you are saying. Our typical work
environments provide for email non-repudiation,
meaning you would be hard pressed to prove that
you did not send an e-mail if it came from your
address.
3. Be Polite and Respectful
If you find yourself responding in anger, take a
break, get something to drink, think about what
you want to say before you type it. Think before
clicking "Send." Ensure you are writing your
email in a calm and respectful frame of
mind...even if the other person is not doing so.
December 4, 2014 — Christmas Cocktail
LUCE RESTAURANT
Hilton Hotel & Conference Centre
Lady Young Road
Morvant
6:00pm—9:00pm
Dress Code: Business Attire
4. Know Your Situation
Check the tone of your language. Are you
writing in a way that may seem bossy or angry
when it is not the intention? Think about how
your e-mail feels emotionally. When the sender
includes multiple persons in an e-mail,
determine if it is necessary to hit "Reply All."
5. Do Not Forward Chain E-mails
We have all received an e-mail or text message
saying "forward this to 10 people or something
bad will happen," or "you e-mail address will be
deleted," or "XXX company will donate money
to save this person's life." These e-mails are a
nuisance to networks and cost companies
millions of dollars.
December 2014
Audi-Wire
5
November Workshop Series
Operational Auditing and Report Writing Skills – November 18-20, 2014
This workshop series was held through the period 18-20 November 2014 at the very well-equipped training facilities at Arthur Lok Jack
Graduate School of Business, Champ Fleurs and was equally complemented with breakfast, lunch and break sessions affording attendees
a good opportunity for peers networking and the sharing of a valuable mix of experiences and perspectives. The fully subscribed event
over the three days had representation from a broad spectrum of organisations across the public and private sectors.
The workshop was opened by the Vice
President Professional Development,
Florence
Lee-Bhagwandass,
who
provided a brilliant and useful insight into
the value of continued education and
training of Audit Professionals. She
encouraged participants to become a
member of the IIA in order to realise
benefits from this prestigious professional
body in order to develop and enhance
their audit and professional capabilities.
The workshops were conducted by expert
audit professionals possessing a wealth of
knowledge and experience and able to
deliver exciting and thought provoking
sessions. Both presenters are recognized
members of the IIA Trinidad and Tobago
Local Chapter, with Mr. Kowlessar
serving as past President and current
Chairman of the Board of Governors.
Mrs. Elias – Wilson, a current Governor
of the Chapter, has also been trained by the IIA as a certified trainer and served as a past executive member.
The workshops touched two critical areas facing every audit professional at their organizations. The range of tools and best practice
measures presented over the three days provided participants with the adequate resources and a clear roadmap to face their challenges in
a more amenable way. This workshop can indeed be considered another success story.
-by Professional Development Subcommittee IIA-TT Chapter
Republic Bank Workshop Training
Republic Bank
requested the training
services of the local
IIA Chapter to deliver
a private workshop to
their staff members.
This session was
facilitated by Mrs.
Claire Gomez-Miller,
a leader in the audit
profession who
engaged and captured
the attention of RBL
staff.
For training please
contact the IIA
Trinidad & Tobago
Chapter.
[email protected]
625-5558
December 2014
Audi-Wire
6
Analytics Refresher Analytics combines data querying with sound statistical concepts and subjectmatter knowledge to test hypotheses or make predictions. They can help make
sense of large volumes of data by highlighting patterns or anomalies, thereby
turning everyday information into useful and actionable insights that inform
decision-making. Analytics have become more sophisticated as technology has
evolved, and today many internal audit
departments use software tools to help
extract and analyze data from their
organizations' systems.
Unlock Your Door to Opportunity with IIA
Global Certifications
The IIA offers a comprehensive certification portfolio
for internal auditors that can serve as the key to
unlocking your next opportunity within the profession;
Analytics Evolution
enhancing your credibility and adding clout to your
In recent years, there has been a vast
increase in the amount of data that is
stored electronically. This fact,
combined with the increasing sophistication of enterprise resource planning
systems and data analysis tools, has the potential to transform the internal audit
process through the use of advanced analytics. Internal auditors now have the
ability to gain insights from, and test correlations with, a vast array of
information on the Internet, which can be as diverse as competitor information,
regulatory filings, and conversations about social media.
resume. By earning your Certified Internal Auditor®
(CIA®), Certified Government Auditing Professional®
(CGAP®), Certified Financial Services Auditor®
(CFSA®), Certification in Control Self-Assessment®
(CCSA®), and Certification in Risk Management
Assurance™ (CRMA®) certification, your clients and
employer know that you are a valuable team asset who
Today, analytics assist internal auditors with a variety of capabilities from
is highly motivated, knowledgeable, and committed to
planning and risk assessment to fieldwork. They also enable internal auditors to
provide more compelling business insights. Analytics can be classified into three ensuring quality is part of everything you do. IIA
broad categories:
certifications set you apart from other professionals,
 Retrospective statistical analysis, used to gain deeper insight into important
unlocking your full potential and opening up countless
subprocesses in financial and operational areas of the organization.
 Forward-looking models, built to predict which areas of the business are
riskier or simply require a greater level of focus.
 Advanced visualization analytics, used to help transform the organization
by providing deep analytical insights and actionable information.
In short, analytics have rapidly evolved from allowing internal auditors the
ability to provide perspective in hindsight to helping them anticipate the future
— with foresight.
doors of opportunity for career growth and success. See
Greater Business Insights
Data analytics provide internal auditors with the potential to dramatically
increase the value of the insights they can provide on business risks, issues, and
challenges. The first step in deploying analytics effectively is recognizing the
business problem that needs to be solved — what is the issue? Once an issue has
been identified, analytical capabilities can be used to source facts, drive
understanding, and generate knowledge by addressing three questions:
 What data can be leveraged to understand the business issue and improve
performance? It is important to understand the source of the data and the
systems and processes that produce it. Effective data management and
governance supports data accuracy, completeness, and reliability.
 What is known about the business issue? What has happened and why?
What should be done about it? Analytics can play an important role in
answering these questions and optimizing current performance.
How can organizations look to the future and build analytical insights directly
into business processes? Analytical insights draw predictions from the discovery
(Continued on page 7)
what awaits you on the other side of the door.
Visit: http://www.theiia.org
Contact us for more information if you are
interested in pursuing any certification.
December 2014
Audi-Wire
(Continued from page 6)
and analysis of data and resulting trends. Analytics look at data from within the
organization and outside it, with a focus on patterns, data mining and
optimization, data visualization, advanced algorithms, neural analysis, and social
networks.
How to Use Analytics
One of the most important uses of analytics is to enhance risk management.
Analytics help provide a clearer understanding of risks and insights as to how
they can be mitigated. Ultimately, the objective is to develop and implement an
analytics capability that provides internal audit with greater insight into the risks
associated with each audit.
7
The Truth Is You Are
Creative
All internal auditors have the capacity for creative
thinking: the secret is how to tap into it.
Let’s start this off with one important premise:
Creativity is necessary for any person, organization, or
profession to move forward and succeed. The past is
littered with the wreckage of those whose best
intentions resulted in no more than just maintaining
the status quo.
But the problem is that far too many people believe
creativity is a special gift bestowed from on high to a
select few. And many, many, many (add as many
“manys” as you would like) internal auditors have
bought into that belief. They seem to think that living
in the realm of facts and figures and documents and
support and checks and cross-checks and tics and ties
A third area for internal auditors to consider is whether and how to leverage
and reviews and re-reviews and re-re-reviews and
analytics performed for the audit throughout the organization. In this regard,
details of the ad nauseam variety means they must shy
internal audit can become an important change agent, driving business insights
away from creativity like a grammatically incorrect
throughout the organization. Business managers and leaders of other risk
audit report. They believe their own press clippings,
functions have a need to understand risks and correlations between data. In many
living under the misapprehension that creativity is not
cases, analytics developed for use by internal audit can be valuable business tools
in their bailiwick and should remain an aperitif used
and ownership can be transferred to business or functional leaders for ongoing
occasionally to cleanse the palate before going back to
use.
the things they know how to do.
A second important use for analytics is to develop a deeper understanding of
potential audit issues. Once a potential issue has been identified, analytics can
source the facts (e.g., what does the data tell us about the issue?), drive
understanding of the facts (e.g., what is happening?), and generate knowledge
(e.g., why is it happening?) to provide more effective recommendations.
Getting Started
Internal auditors beginning to implement analytics should focus on six guiding
principles:
1. Link goals to clear business drivers. Establish a clear understanding of
expected benefits from analytics and ensure linkage to audit planning. This
should translate into clear objectives that drive the strategy and long-term vision
and surface near-term opportunities.
2. Know the data. It drives the insights that fuel the benefits from any analytics
program. It is important for auditors to understand both the data they have and
the data they don't have when determining how and where to begin. This
knowledge also prioritizes efforts to collect what's missing for future analyses
and enhancements to the analytics program.
3. Start simple. Starting with a targeted, ad hoc analytics program will likely
yield greater benefits in terms of speed to insights, learning, and value. Take the
time to learn first and then deploy necessary capabilities across the organization
later.
4. Leverage existing insights. These insights may provide clues related to the
risks and business areas to start with, and can jump-start the program and build
consistency with prior initiatives.
5. Make it actionable and measurable. Develop a plan to take action and
measure results accurately early. The organization, systems, and processes that
support execution must be able to take action with the insights that are generated.
6. Test and learn. Test different approaches and areas of the business. Learn
from the results.
A relevant quote from Apple co-founder Steve Jobs
suggests otherwise: “Creativity is just connecting
things. When you ask creative people how they did
something, they feel a little guilty because they didn’t
really do it, they just saw something. It seemed
obvious to them after a while.”
People who run from creativity have to keep in mind
one important truth: It’s really not that big a deal.
Fundamentally, creativity involves just keeping your
eyes, ears, and mind open to new concepts. It is a
function of keeping the inputs flowing and then
finding ways to bring those inputs together in different
ways. After practicing that for a while, the next thing
you know you’re being creative without really
knowing it.
Here’s your tip for today: Pretend to be creative. I
know of people who shy away from creativity because
of fear, because they think they can’t do it, and
because of a whole host of excuses. But ultimately,
they think that if they act creatively they are somehow
not being true to themselves and to their profession.
They believe that by acting creatively they are lying.
Internal auditors are at the beginning of a new era in the use of analytics to
enhance the internal audit process. Taking the steps outlined above can help
internal audit departments realize gains in effectiveness and efficiency while
providing greater business insights.
As cartoonist and author Lynda Barry once aptly said,
“There is no lie in pretending.” You don’t have to lie;
you just have to pretend you’re creative. And the more
you pretend, the more it will become a reality.
By the way, did you notice what I just did? I’ve had
—Author: Neil White, CISA, is a principal and Rachel Bond, CIA, is a senior the Steve Jobs quote for a while. I stumbled across the
consultant with Deloitte & Touche LLP in New York
(Continued on page 9)
December 2014
ScotiaBank Cancer Walk
The IIA-TT supported the ScotiaBank Women
Against Breast Cancer efforts by members of our
Executive and Governors attending the 5K walk.
Audi-Wire
8
IIA-TT 9th Gold Chapter
Achievement Award
IIA-TT received its 9th Gold Chapter Achievement Award for 2013-14 term
headed under Mr. Roger Ramdwar at the Caribbean District Workshop; this
is recognition of Chapter performance and compliance with IIA Inc service
requirements to its Members, Profession and Administration.
The workshop was attended by Mr. Larry Kowlessar and Mrs. Camille
Cumberbatch-Dhoray. This workshop is an annual event where all IIA
Caribbean East and West Presidents and Executives/Governors come
together to discuss IIA matters.
From left to right:
Ms. Judith Nelson—
District Representative
-Caribbean East, Mr.
Larry Kowlessar Chairman, IIATT
Board of Governors,
Mrs. Camille Cumberbatch-Dhoray - IIATT
President, Ms. Nancy
Cifuentes - Chapter
Relations Manager and
Ms. Raven Catlin District Advisor CAE Success Attributes
Although leadership definitions and style may vary, there are numerous common traits found in leaders who are successful. To help identify these traits
within the audit profession, several boards members were asked about the qualifications every chief audit executive (CAE) should possess. These are people who know effective leadership when they see it.
What qualifications should the chief audit executive have? "I believe a CAE, first and foremost, needs to be technically competent
and a great communicator. Oftentimes, technical people are not strong communicators, but I believe a CAE absolutely has to be a strong
communicator. They must be direct and firm in their communications, but they also need to be conciliatory, helpful, and be able to relate
to their audience. Communication skills will definitely differentiate a leader in this field. CAEs also have to be strong developers of people because without the whole team, the department won't function as well as it can. The ability to develop talent and to utilize people
against their strongest attributes is necessary for all leaders, but especially in the internal audit department." — Leslie Murphy, president
and CEO of Murphy Consulting, past chair of the AICPA, and director on several boards.
“My experience as an audit committee member over the years has taught me that a CAE has to have strong leadership qualities, has to be
compassionate in understanding the workload of his or hers various team members, and has to be able to diplomatically deploy the right
members in the right location — because even having the knowledge base, if the situation isn’t right and you put the wrong person there,
it causes a disruption to the business. So, you have to have leadership skills, interpersonal skills, a strong financial background, and more
importantly you have to have an understanding of what the future is going to look like so that you can protect us as we go forward.” —
Clarence Davis, member of several public company boards of directors, retired chief operations officer of the AICPA.
“The CAE has got to have experience doing audits in multiple geographies, multiple product segments, and, hopefully, multiple technologies. He or she has to be conversant not only in controls but also in business processes and
be able to execute the internal audit function properly. The second component is that CAEs need to be able to staff
their function very strongly — identifying and developing talent, and providing the coaching and the feedback to
make sure the whole department functions effectively. They also have to be good listeners because they need to be
able to listen to the audit committee and understand where the audit committee concerns are and be responsive to
those concerns. They also should be good communicators outward both to the audit committee in terms of what the
audits say, and what they show and what the issues are, but also to management so it becomes collaborative as opposed to a ‘gotcha’ kind of function.” — Martin Coyne is CEO of Learning Network LLC, and serves on several
boards of directors.
December 2014
Audi-Wire
9
(Continued from page 7)
Lynda Barry quote last week. As I taped Barry’s quote to the wall, I noticed the Jobs quote and made a connection. I didn’t really do
anything; I just saw something.
Honest, it is that simple. Pretend and you will see that it is not lying.
The truth is that you are creative.
—Author: Mike Jacka, CIA, CPA, CPCU, CLU, worked in internal audit for nearly 30 years at Farmers Insurance Group.
He is currently co-founder and chief creative pilot for Flying Pig Audit, Consulting, and Training Services (FPACTS).
IaMobileEdition
GetConnected
Now you can enjoy Internal Auditor (Ia) magazine in a format that's as mobile as you are. Ia's
mobile app includes everything that appears in the print magazine ... and more, including
convenient access to Ia blogs, exclusive video content, and the latest audit-related news.
Our print issues are married with articles from real-time content feeds for a seamless, engaging
experience on your mobile device. Users can search across more than two years' worth of archives
for topics of interest and bookmark pages for future reference. Each app platform uses native device functionality for optimum
performance and readability. Plus, downloaded issues are available for offline reading, and push notifications let you know as soon as
new issues become available.
Download the Ia app today — free to Ia subscribers. Available for iPhone, iPad, iPod Touch, Android, and Kindle Fire.
iPad, iPhone, & iPod Touch
Google Play (Android Tablets & Phones)
Kindle Fire
Professional Centre, Rooms B301/302
#11-13 Fitz Blackman Drive, Wrightson Road Ext.
Port of Spain, Trinidad
Phone: (868) 625-5558
Fax: (868) 623-4560
Mobile: (868) 769-1671
Email: [email protected]
Website: https://chapters.theiia.org/trinidad-and-tobago/Pages/default.aspx
Contact us to submit articles, tell us what training you’re
interested in or ask us about getting certified.
December 2014
Audi-Wire
From your IIA Trinidad & Tobago Chapter
10