IIA Today July 2011 by The Institute of Internal Auditors

Today A MESSAGE FROM THE INSTITUTE OF INTERNAL AUDITORS

The internal audit community gathered in Malaysia for the The IIA’s 70th International Conference and left energized about the profession’s future.

4 6 10 Vo l u m e 2

Issue 4

Ju l y / Au g u s t 2 0 1 1

News from The IIA and the Internal Audit Profession International Conference Highlights September and October Training Opportunities

Tired of treading water with your current audit management program?

Let CCH TeamMate come to your rescue.

FREE

When you switch from any commercial audit management system to TeamMate’s world leading software, you’ll receive one FREE year of use as well as FREE implementation services to help you set sail. Don’t miss the boat! This offer expires September 30, 2011. To learn more about the CCH TeamMate Rescue program, call 1-888-830-5559 or visit ARCLogics.com/TeamMateRescue.

Welcome message

Today PUBLICATION DIRECTOR

Carrie Summerlin EDITOR

Melissa Calhoun STAFF EDITORS

Lisa Krist Paula Michaels CONTRIBUTING EDITORS

Christina Brune ART DIRECTOR

Jon Peters Graphic Designer

Brandie Tate PRODUCTION MANAGER

Lori Shewack IIA PRESIDENT AND CEO

As vice president of Global Relations and Development for The IIA, I’m pleased to announce the great success of The IIA’s recent International Conference in Kuala Lumpur, Malaysia. The Institute’s annual International Conference is the premier event for the internal audit profession, a unique learning opportunity that showcases the best speakers around the world. With seven general session presentations and nine tracks featuring an unprecedented number of concurrent sessions, this year’s conference once again represented the world’s largest internal audit education experience. It also provided unparalleled networking opportunities, as it brought together more than 2,200 conference delegates from across the globe — making it the largest International Conference held outside of North America. This was the first time The IIA’s International Conference was held in Asia, a true reflection of how global our organization has become. The 2011 International Conference was also unique in that its annual gala was dedicated to the celebration of The Institute’s 70th anniversary. (Turn to page 8 to see photos from the conference.)

Richard F. Chambers, CIA, CCSA, CGAP IIA CHAIRMAN OF THE BOARD

Denny Beran, CIA, CCSA

IIA Today is a bimonthly publication produced exclusively for members of The IIA. To learn more about this publication, please visit www.theiia.org/IIAToday . We welcome all comments, questions, and feedback. Please send your message to IIAToday@theiia.org and include your name and contact information.

The Institute of Internal Auditors

During the conference, IIA leaders announced the development of a new Global IIA website, www.globaliia.org , which will be launched in the coming months — yet another reflection of how The IIA has evolved into a truly global organization. The new site will showcase The IIA’s core global products, including the IPPF in a variety of languages, and act as a portal to IIA Institute websites around the world. During the annual committee meetings held after the conference, the new IIA Board of Directors was elected, and the new board structure that was approved last year went into effect, increasing the number of directors-at-large on the board (from three to five). This is quite significant in terms of The IIA’s continued globalization efforts, as it allows for more representation from smaller and developing Institutes in The IIA’s governance. Energized from the success of this year’s International Conference, we’re already gearing up to put together an exciting program for the 2012 IIA International Conference, which will be held July 8-11 at the world-class Boston Convention and Exhibition Center in Massachusetts. Mark your calendars. We hope to see you all there! Sylvia Gonner Vice President, Global Relations & Development The IIA Global Headquarters

w w w. t h e i i a . o r g

Ju l y / Au g u s t 2 0 1 1

News

2010 Annual Report Now Available The IIA, now in the midst of celebrating its rich 70-year history as the leader of the internal audit profession, has recently released its 2010 Annual Report: Positioned for Success. The report recaps the year’s achievements, including the successful launch and growth of the Audit Executive Center, a tailored program that provides chief audit executives (CAEs) with a suite of information, products, and services to help them respond to the unique challenges and emerging risks of the profession. Another key 2010 initiative was The IIA’s “Membership Means More” campaign, which includes a host of exclusive member privileges such as the launch of this members-only newsletter and new member discounts and complimentary products. One of the most popular value-added membership enhancements was the addition of free monthly Member-Only Webinars on timely topics important to the profession. Other top 2010 accomplishments include: • Continual development of global certifications, standards, and guidance. • The successful 2010 International Conference held in Atlanta, which drew more than 2,700 delegates. • Formation of a global external body to oversee due-process procedures for setting the Standards and other elements of the IPPF.

IIA’s New Chairman Announces His Theme Denny K. Beran, CIA, CCSA, senior vice president and director of audit at J.C. Penney Company Inc., has been elected 2011–2012 chairman of The IIA’s Board of Directors. As The Institute’s chief spokesperson and advocate for the internal audit profession worldwide, Beran chose “Assess Our Relevance,” as his chairman’s theme. “As professional internal auditors, we have to remain relevant to our organizations,” says Beran. “The IIA global and each chapter and institute must also remain relevant to their members by focusing on the value The IIA delivers each and every day.” As Beran travels the world this year, visiting Chapters and Institutes and speaking to The IIA’s constituents and 170,000 members, he will encourage fellow practitioners to assess their own relevance and to strive to be an indispensable asset to their organizations. “My priority for the coming year is to engage our members, to take time to hear their voice, understand their perspective, and get their insights into how internal auditors can become more relevant in the years ahead.” According to Beran, to remain relevant internal audit practitioners must start by having the courage to stand up and have their voice heard, and to tell management and the audit committee the things that need to be improved. They must also: ■■ Demonstrate their integrity and be committed ■■ ■■

■■

• Release of the five-volume Global Internal Audit Survey, a component of The IIA Research Foundation’s ongoing Common Body of Knowledge study. Visit www.theiia.org/AnnualReport to access the 2010 Annual Report.

I I A To d a y

w w w. t h e i i a . o r g

■■

to accountability. Constantly challenge themselves and evaluate the skills they have. Be perceived as risk and control experts, the people within the organization that management goes to for advice. Be able to use technology to develop meaningful exception reports or monitoring tools. Be strategically focused and involved early in the process, when management is rolling out new initiatives or new strategies.

Watch a short video about Beran’s theme, “Assess Our Relevance,” at www.theiia.org/Chairman2011 .

News

Two New Practice Advisories Discuss External Assessments The IIA has released two new practice advisories to help practitioners in private and public-sector organizations comply with Standard 1312: External Assessments, which states that external assessments must be conducted at least once every five years by a qualified, independent reviewer or review team from outside the organization. Practice Advisory 1312-3: Independence of External Assessment Team in the Private Sector outlines areas to be considered when determining the independence of the assessment team. It defines the phrase independent of the organization, and cautions practitioners to consider the real and potential conflicts of interest that may arise from relationships with the organization or its personnel. It also notes that the independence of the assessment team, including poten-

tial conflicts of interest, should be discussed with the board. The practice advisory indicates that within the private sector, individuals from within the same organizations but from another department, or from a related organization, are not considered independent for the purposes of conducting an external assessment. It goes on to state that reciprocal external assessment teaming arrangements among three or more organizations may be structured in a manner that achieves the independence objective. Practice Advisory 1312-4: Independence of the External Assessment Team in the Public Sector offers similar guidance for practitioners operating in the public sector, which includes all tiers of government and governmentowned or controlled authorities or

enterprises. The advisory states that quasi-governmental bodies such as the United Nations or organizations controlled by multiple governments should follow guidelines for the private sector. It also advises chief audit executives who are selecting a team to perform the assessment to consider the extent of the team’s public-sector experience. “This guidance is critical since the independence of the external assessment teams allows organizations to conform with the International Standards for the Professional Practice of Internal Auditing, which can lead to increased stakeholder confidence,” says Glenn Darinzo, a director in The IIA’s Standards and Guidance area. IIA members can download PDF versions of the practice advisories for free, www.theiia.org/NewPracticeAdvisories .

IIA Builds a Video Resource Library In the interest of better serving the needs of the internal audit profession, The IIA is embarking on a new initiative to develop an online video resource library featuring best practices and other content on audit, governance, risk management, and more. We invite you to share your videos and help us build the most robust public-facing internal audit online video resource available. Specifically, we’re seeking short video clips that address the following: • Governance • Risk • Internal Audit • Operational/Performance Auditing • Fraud • Technology • General Management • Chapter Activities

• Financial and Compliance Auditing • Internal Control • Institute Activities

Video clips must be less than five minutes long. Sharing your videos is easy. Simply upload your video clips directly to The IIA’s video repository, www.theiia.org/VideoUpload .

w w w. t h e i i a . o r g

Ju l y / Au g u s t 2 0 1 1

Feature story

At the 2011 International Conference in Malaysia, The IIA celebrated its 70th anniversary and demonstrated its unyielding commitment to serving the internal audit profession globally.

I I A To d a y

w w w. t h e i i a . o r g

Feature story More than 2,200 conference delegates from 93 countries around the world descended on Kuala Lumpur, Malaysia, July 10 to July 13 for The IIA’s 70th International Conference, the first-ever International Conference held in Asia. The conference theme, “Standing Tall,” was inspired in part by the city’s world-famous Petronas Twin Towers, the tallest twin towers on the planet. The theme was also reflected in presentations that addressed the need for internal auditors to step up their game to meet stakeholders’ expectations. One such presentation was Lord Robert Smith of Kelvin’s general session, in which the UK expert on governance issues addressed the future outlook following the global financial crisis and the importance of building an effective relationship between internal auditing and the audit committee. “It’s important for audit committees to be courageous,” he said. “Going forward, audit committees need to make sure they have a strong internal audit function, hold external auditors accountable, and make sure they are communicating with their boards.” Six additional general session presentations featured renowned keynote speakers such as Carman Lapointe, under-secretary-general for Internal Oversight Services at the United Nations, who spoke about how internal auditing must deliver high-impact results with fewer resources. Y.B. Senator Dato’ Seri Idris Jala of the Malaysian Prime Minister’s Office provided an overview of Malaysia’s Government Transformation Program; and Carolyn Dittmeier, vice president of ECIIA, led a panel discussion on sustainable success. The conference also featured eight pre-

conference sessions as well as nine tracks with more than 60 concurrent sessions and plentiful networking opportunities. Conference delegates were treated to a one-of-a-kind 70th Anniversary Gala Dinner, complete with a cocktail reception that featured interactive stations where conference attendees could try their hand at pewter-smithing, batik painting, and basket weaving. The memorable seven-course dinner featured Chinese cuisine and a high-energy “Dances of the Decades” performance, followed by a cake-cutting ceremony, and music by the critically acclaimed Aseana Percussion Unit. A number of awards were also presented during the conference. Portia Ngesi of Mondeor, South Africa, received recognition for becoming the 100,000th Certified Internal Auditor®, and Loso Judijanto, of Indonesia, was awarded for becoming the 2,000th Certified Government Auditing Professional® earlier this year. Read more about awards presented on page 14.

The IIA displayed its continued dedication to international members with the announcement that it has created a new global website focused on connecting all Institutes and advocating the profession worldwide. The website, www.globaliia.org, is expected to launch in 2011 and will allow members to have direct access to IIA Institutes, key resources, standards and guidance, research, certification information, a global event calendar, and more. During The IIA’s annual committee meetings, conducted after the conclusion of the conference, the new IIA Board of Directors was elected. Denny Beran, chief audit executive of J.C. Penney Company Inc., was named chairman of the board for 2011–2012. See page 4 for the full article. At the close of the event, IIA President and CEO Richard Chambers reminded attendees that the conference was the culmination of an entire year’s work. “It requires literally thousands of hours of preparation to design, develop, and bring to fruition an event of this magnitude,” he said. “I am so proud of and thankful for the many volunteers and staff who have worked so hard to bring us The IIA’s 2011 International Conference.”

w w w. t h e i i a . o r g

Ju l y / Au g u s t 2 0 1 1

Feature story

The setting for the 70th Anniversary Gala Dinner.

Henna tattoos were inked on attendees before the Gala Dinner.

A traditional Malaysian dancer entertains the crowd at the Welcome Reception.

Conference delegates celebrate at the Gala event.

I I A To d a y

w w w. t h e i i a . o r g

Feature story

A wood-carving station was available for attendees before the Gala Dinner.

Denny Beran (left), the new chairman of the board for 2011-2012, and Günther Meggeneder, past chairmain of the board, celebrate The IIA’s 70th anniversary.

Mark Your Calendar for Boston in 2012

IIA President and CEO Richard Chambers answers questions during a press conference.

Plans for The IIA’s 2012 International Conference, held July 8–11 in Boston, are already well underway. With the theme “Revolutionizing Internal Audit,” the conference is expected to draw 3,000 professionals from more than 100 countries. The world-class Boston Convention and Exhibition Center, located just two miles from Boston’s Logan International Airport, will host this premier educational event. Delegates will benefit from numerous concurrent sessions on today’s pressing issues and industry best practices, renowned keynote speakers from Harvard Business School and other prestigious organizations around the world, networking opportunities, exciting events, and more. Plan now to experience this vibrant city, renowned for its cultural facilities, world-class educational institutions, champion sports franchises, and historical landmarks. Register before Feb. 29, 2012, and take advantage of significant savings. For ongoing conference details and program updates, visit www.iia2012ic.org , or follow us on LinkedIn, Twitter, and Facebook.

w w w. t h e i i a . o r g

Ju l y / Au g u s t 2 0 1 1

Calendar

2011 IIA Members always benefit from discounted training from The IIA

September 2011 6, 8, 13, 15 / Virtual Seminar

Performing External Quality Assessments of the Internal Audit Activity / 2:00 – 5:20 p.m. ET

12 – 15 / IIA/Deloitte Seminar Auditing JD Edwards / Chicago, IL

12, 14, 16, 19, 21, 23 / Virtual Seminar Operational Auditing: Advanced / 3:00 – 5:15 p.m. ET

13 – 16 / Seminar / San Diego, CA Select from 11 of our most popular courses including Effective Writing for Auditors (updated) and Internal Auditing of Anti-Corruption and FCPA Compliance Programs (new).

19, 21, 23, 26, 28, 30 / Virtual Seminar Value Added Business Controls: The Right Way to Manage Risk / 3:00 – 5:15 p.m. ET

19 – 22 / IIA/Deloitte Seminar SAP ERP Technical Audit / Chicago, IL

20 – 23 / Seminar / Washington, D.C. We’re bringing four courses to the nation’s capital including the tried-and-true Audit Manager Tools and Techniques.

20 – 23 / Seminar / Edison, NJ The IIA sets the standard for world-class training with courses on Audit Report Writing, Contract Auditing, Enterprise Risk Management: An Introduction, and more.

20, 22, 27, 29 / Virtual Seminar Audit Report Writing / 2:00 – 5:20 p.m. ET

25 – 28 / Midwestern Regional Conference Hilton Milwaukee City Center / Milwaukee, WI

25 – 28 / Canadian National Conference Sheraton Centre Toronto Hotel / Toronto, Ontario, Canada

26, 28, 30, October 3, 5, 7 / Virtual Seminar Enterprise Risk Management: An Introduction / 3:00 – 5:15 p.m. ET

26, 28, 30, October 3, 5, 7 / Virtual Seminar Risk-based Auditing: A Value Add Proposition / 3:00 – 5:15 p.m. ET

I I A To d a y

w w w. t h e i i a . o r g

Courses, dates, and locations are subject to change without notice.

Calendar

3, 5, 7, 10, 12, 14, 17, 19, 21, 24, 26, 28 / Virtual Seminar CIA Review, Part III / 6:00 – 8:15 p.m. ET

4 – 6 / ITAC 2011 – IT Audit & Controls Conference (MIS/IIA Event)

InterContinental Buckhead Atlanta / Atlanta, GA

4 – 7 / Seminar / Dallas, TX Everything’s bigger in Texas, including the number of course offerings. Select from 14 courses including Operational Auditing and Project Management Techniques.

10 – 13 / IIA/Deloitte Seminar

NEW! SAP GRC: Access Control and Process Control (IIA/Deloitte) / Costa Mesa, CA

17 – 19 / All Star Conference The Bellagio / Las Vegas, NV

17 – 20 / IIA/Deloitte Seminar

2011

October 2011

Auditing Oracle Applications / Boston, MA

24, 26, 28, 31, November 2, 4 / Virtual Seminar Operational Auditing: An Introduction / 3:00 – 5:15 p.m. ET

25 – 28 / Seminar / Chicago, IL Enhance your professional repertoire by attending courses led by subject matter experts on topics including risk management, construction audits, continuous auditing, and more.

Visit www.theiia.org/Training for additional details and to register, and log in to enjoy exclusive members-only discounts.

31 – November 3 / Seminar / Las Vegas, NV New and updated courses available in Las Vegas include Statistical Sampling for Internal Auditors, Control Self-assessment: An Introduction, and Performing External Quality Assessments of the Internal Auditing Activity.

Five Reasons to Let Us Come to You with On-site Training 1. 2. 3. 4.

Courses can be customized to accommodate your needs and specifications. The quality of our instructors and their passion for educating others. Our portfolio of curricula, including 60+ courses on a wide variety of topics. IIA On-site Training combines live and virtual delivery methods so your staff can benefit from training regardless of their location. 5. On-site Training’s pricing is all-inclusive and is an affordable option when training groups of five or more. Call +1-407-937-1388 for details or visit www.theiia.org/Onsite. Courses, dates, and locations are subject to change without notice.

w w w. t h e i i a . o r g

Ju l y / Au g u s t 2 0 1 1

Bookstore

In celebration of The IIA’s 70th anniversary, The IIA Research Foundation Bookstore is offering a 20 percent discount on online purchases of seven of its newest publications. Visit www.theiia.org/bookstore by August 31 and enter the promotion code 70TH to receive the discount on any of the following books*: Audit Committee Effectiveness What Works Best, 4th Edition The recent economic crisis has increased the business community’s focus on both the role of the audit committee and the information companies disclose. In fact, the audit committee’s responsibility to ensure accurate and transparent disclosure is more important today than it has ever been. In addition to heightened scrutiny, stakeholders’ expectation that audit committees take on greater responsibility for risk management and focus on fraud prevention has added to the audit committee’s workload. Audit Committee Effectiveness - What Works Best, 4th Edition, is a convenient guide to help audit committees meet these ever-demanding expectations. The guide offers a collection of leading practices to help audit committees carry out their many complex respon12

I I A To d a y

w w w. t h e i i a . o r g

sibilities, understand what is expected of them, and how they can best address the challenges of their critical role. The guide also incorporates survey trends and lessons learned. It’s a must-have for audit committees looking to enhance their overall performance.

Evaluating and Improving Organizational Governance All personnel — from the governing board to the organization’s front line — can use this handbook as an important resource in providing guidance on fulfilling their governance responsibilities. The book offers a number of fundamental principles and practices to consider when framing an organization’s governance structures, and it provides comprehensive information on defining strategies, outlining legal requirements, and identifying the roles and responsibilities of key “players” in organizational governance.

Bookstore

International Professional Practices Framework (IPPF) 2011 The IIA’s authoritative guidance for the internal audit profession was recently updated and went into effect Jan. 1, 2011. The IPPF presents current, relevant, internationally consistent information that is required by internal audit professionals worldwide, and it includes both mandatory and strongly recommended guidance. The new IPPF 2011 features improved clarity, increased transparency, measurable accountability, a defined cycle of review for all guidance, and availability in hard copy and as a fully interactive CD-ROM.

The IIA’s Global Internal Audit Survey: A Component of the CBOK Study 2010 Bundle The most comprehensive global study ever conducted on the practice of internal auditing, the 2010 Global Internal Audit Survey, includes responses from 13,582 practitioners in more than 107 countries. Results of the study are explored in the following bundled six study reports: ■■ Characteristics of an Internal Audit Activity ■■ Core Competencies for Today’s Internal Auditor ■■ Measuring Internal Auditing’s Value ■■ What’s Next for Internal Auditing?

Implementing the International Professional Practices Framework, Updated 3rd Edition Designed to serve as a practical guide for applying the IPPF, this book outlines the specific actions auditors must take to conform with The IIA’s International Standards for the Professional Practice of Internal Auditing and other elements of the IPPF. It reviews the essential elements required to provide effective internal audit services and provides practical tools and techniques for delivering high-quality internal audit services.

Auditing Social Media: A Governance and Risk Guide This one-stop guide was designed to help businesses navigate through the maze of risks and governances surrounding social media. It explains how an organization can ensure it has adequate measures in place to capitalize on social media while protecting itself from excessive risk. The guide arms auditors with the information they need to understand, evaluate, and audit the organization’s approach to social media.

■■ Imperatives for Change: The IIA’s Global Internal

Audit Survey in Action ■■ A Call to Action: Stakeholders’ Expectations and Perceptions Study

Internal Auditing: A Guide for the New Auditor, 3rd Edition This handbook is a useful guide for new auditors entering the exciting and rewarding profession of internal auditing. It offers practical information on conducting engagements, report development, internal control, risk-based auditing, control self-assessment, and more. The guide prepares new auditors by including an overview of the profession, tools used by successful internal auditors, and an overview of The IIA’s International Standards for the Professional Practice of Internal Auditing.

*The 70th anniversary promotion is valid for online purchases only. Offer expires August 31.

w w w. t h e i i a . o r g

Ju l y / Au g u s t 2 0 1 1

special feature

Spotlighting Commitment & Achievement The IIA recognized longtime volunteers and high achievers during The IIA’s 2011 International Conference in Malaysia.

Gerald D. Cox, CIA, and Robert N. McDonald, CIA, CGAP, were presented with the Victor Z. Brink Award for Distinguished Service for their outstanding service to the profession and longtime involvement in IIA activities. Pictured here (from left) is Gerald’s wife Angela Cox, Gerald Cox, Robert’s wife Robyn McDonald, and Robert McDonald.

Receiving The IIA’s Bradford Cadmus Memorial Award, recognizing contributions to the advancement of the profession, was Richard J. Anderson. He is a longtime Chicago Chapter member and supporter of The IIA’s Research Foundation and Professional Issues Committee, among other activities. Pictured here (from left) is Richard’s wife Mary Anderson; Günther Meggeneder, past chairman of the board; and Richard Anderson.

Other award recipients: Rachel Bond, Deloitte & Touche, New York City, received the Esther R. Sawyer Award for her paper “Internal Auditing Rotational Programs: Opportunities for Internal Audit to Add Value.” Igor Gouvêa, CIA, of IIA-Brazil, received the William B. Smith Gold Award for achieving this year’s highest score on the CIA exam. 14

I I A To d a y

w w w. t h e i i a . o r g

Our Principal Partners Make a Difference The IIA acknowledges the ongoing support from our Principal Partners, who help enhance the internal audit profession by sharing their resources and knowledge with our most valuable asset â&#x20AC;&#x201C; our members. These partners actively serve as members and volunteers within The IIA, participate in the introduction of new guidance, develop world-class training, and show their commitment in many other ways in an effort to advance the internal audit profession.

The IIA encourages you to tap into the expertise of our Principal Partners in 2011!

IIA Conference Schedule 247 Maitland Avenue Altamonte Springs, FL 32701-4201 USA

August 29 – 31, 2011 / Orlando, FL

Governance, Risk, and Compliance Conference

Please recycle this brochure by passing it along to a colleague.

September 25 – 28, 2011 / Milwaukee, WI

Midwestern Regional Conference September 25 – 28, 2011 / Toronto, Ontario CAN

Canadian National Conference October 4 – 6, 2011 / Atlanta, GA

ITAC 2011 - IT Audit & Controls Conference (MIS/IIA Event) October 17 – 19, 2011 / Las Vegas, NV

All Star Conference

Issue 4

Ju l y / Au g u s t 2 0 1 1

Today A M E M B E R S - O N LY P U B L I C AT I O N

Vo l u m e 2

Central Regional Conference

07/11609/MC/jp

November 6 – 9, 2011 / Pittsburgh, PA

NONPROFIT ORGANIZATION U.S. POSTAGE PAID THE INSTITUTE OF INTERNAL AUDITORS