Internal Audit Today

Have a look at the piece by Aberdeen Group, "Beyond Demonstrating Compliance, Reinvention of Internal Audit", released August 2009. It includes some contemporary recommendations useful in keeping up during these resource challenged, yet risk aware times.

Conference Close

The conference closed extending thanks and gratitude to Anton van Wyke, Chair of the conference and his team for hours and hours of hard work and dedication that started years previously.

The IIA South Africa did a great job of showcasing there city, their professional community and their ability to greet people in a warm, inviting and friendly way. They also showcased that they do know how to put on a good party.

There are always elements of the international conference that, in hindsight, you would do differently and the host committee along with the international conference committee will discuss, but overall it was a great event.

I expect there will be some discussion of particular key note and session speakers, perhaps some logistic elements, etc., yet overall they should enjoy the strong compliments for their conferences success.

Lessons from the Future

The closing sessions of the conference included a highlight key note address presented by Anton Musgrave, Director of Futureworld, www.futureworld.org

Mr. Musgrave's past to future insights had a real impact on the audience. His messages regarding evolution from silent to boomer to gen x/y/millenial and the related impacts brought out very powerful anticipated change and evolution to come in culture, technology and business. Respecting the challenges of the depth of content he shared in his session, highlighted examples point out that there is a current capability to develop body parts using ink jet printer technology. His taped interview lab practitioner interviews really hit a "nerve" with the attendees. That alone was a powerful message; however, he ofcourse went mush broader as regards impacts.

Considering the value of Encyclopedia Brittanica today versus google, the present day applications of second life in selected business communities for recruiting and reward and the overall recognition that relationships versus organization affiliation is the futureworld direction of our global marketplace. I encourage you to visit his web site and read some of the range of information available.

Business Integrity

Dr. Khotso Mokhele, ArcelorMittal South Africa Chair provided a keynote yesterday providing his personal insights into the current economic crisis, including thought-provoking challenges to the audience. His comments included challenges as to whether the current circumstances indicate there may be flaws to maintaining a free market economic system.

His subtly controversial comments alluded to the flaws specific to the economic benefits of the few "Wall Street" and executive management personalities when companies do well and the significant broad population negative impact to the many when companies do poorly.

His talk was successful in it's soft controversy. It had people talking. However, what it didn't address was the not to be neglected transparency the free market system includes. As financial, operational and technology control professionals we internal auditors know there are many market economies which don't include the level of financial transparency that ultimately exposed the weaknesses and teaching tools the free market system is currently experiencing.

Day 3-Final Day

The South Africans definitely know how to throw a party. Last evening was the gala event traditionally held the evening prior to the final day of the conference. And what a gala it was, lots of great music and lots of dancing. Those of you that were there know and should also know that I have pictures :-) I think everyone had a great time and thank you South African IIA Chapter for putting together a great conference and a great gala event along with the sponsor organizations.

Boardroom Challenges

Nigel Payne, Former Big 4 Partner and current leader of his own professional board member consulting practice provided insights into the challenges, pressures and expectations of being a board member, key charactersics in the makeup of effective board structures and processes which can contribute to appropriate board organizational impact.

Nigel's extensive board audit and risk committee leadership experience uniquely qualifies his perspective.

Nigel's comments highlighted selected elements of board development and operation. They included:

• Board structure, selection process
• Induction practices
• Formalize expectations
• Competence assessed, than independence-industry knowledge
• Chair calibre
• Board dynamics-team that can challenge each other
• Ethical Tone at the top

Further highlighted were elements specifically applicable to internal audit:

• Know who is your primary client
• Independent, objective and competent
• Risk based approach to the role
• Distinguish responsibilities related to assurance versus consulting
• Give consideration to the issuance of a formal opinion on governance, risk management and controls
• Address how audit reports are structured; short, crisp, clear, helpful
• When to in-house, out-source or co-source

Paraphrasing Nigel's final comments he asked the audience to ask "Why are so few internal auditors on boards?"

Boardroom Challenges

A panel session was held this morning including experienced and credentialed forensic, consulting and legal leaders from the local Johannesburg community. The session provided some insights into challenges the audit committee, executive management and the external auditors can face when confronted by entity level whistleblower submissions. The approach to this discussion was stimulated by a multi-part case presented using the medium of a well-acted movie, followed by commentary by the panelists.

Some of the outcomes of this discussion highlighted fraud prevention characteristics all organizations should consider, including, but not necessarily limited to:

• Chief Compliance Officer
• Whistleblowing procedure
• Change Tone at the Top/bonus scheme
• Ethics training
• IA function established
• Improved internal controls
• Fraud response plan