Tuesday, February 26, 2013

2013 Internal Audit Focus - Why compliance is still a high priority ?

According to the IIA Audit Executive Center's Fall 2012 Pulse of the Profession Study , the CAE's identified their top risk coverage priorities for 2013 as follows:

24%  Operational
14%  Compliance
13%  General Financial
12%  SOX Compliance
12%  IT
5%   Risk Management Effectiveness
4%   Fraud
4%   Strategic Business Risk
12%  Other

How do your priorities compare to the above ?

Would you feel comfortable spending 14% of your resources on compliance and only 5% on risk management effectiveness and 4% on strategic business risks?Is compliance risk really that important ?

Are internal auditors still spending significant time on SOX compliance ?

Please share your thoughts .

Wednesday, February 20, 2013

Is IA success influenced by Board & Management desire?‎

The traditional perception indicates that “Internal Audit will be what senior management wants it to be “. I was reminded of this while reading the Framework for Excellence Article in the Ia magazine's February issue. In particular, this statement caught my attention:

“Ultimately, an audit department can only be as advanced as the board and senior management want it to be”

Do you agree with this statement?
More importantly, do you accept this as being the normal way of doing business?
Do you feel that Internal Auditors can influence how the Board & Management perceive their work?

Can you share your experience and share your success story?

picture credit:http://gearingforsuccess.ca/gearing-for-success/

Tuesday, February 19, 2013

Do you have what it takes to be a mentor?

Being a mentor provides a great deal of job satisfaction and makes jobs more enjoyable and productive! However, not everyone has got what it takes to be a mentor.
To be a mentor, one should be:
- a good listener
- a leader
- patient
- willing to share knowledge
- experienced
- committed
- and above all, has the right mindset

Why Become a mentor?

An article published by the ExecutiveBrief lists the following argument :

"A great number of mentors claim that by being a mentor, one earns the respect and recognition of peers. Mentoring enhances authority, thus firming up one’s position within the organizational structure. The mentor likewise is given the opportunity or the chance to learn from the mentee."
While I agree with the above statement, I do not support the notion that mentoring should be used for enhancing the mentor's position. This should not be an objective by itself but can be a byproduct of the mentoring process.

I have come across a useful publication by Human Resources and  Skills Development Canada ( HRSDC), which provides good guidance about mentoring. I would like to share it with you. It can be accessed here.

Have you thought about mentoring?
If you already have, was it rewarding as promised?

These are my thoughts, please share yours!

picture credit:http://www.trudeaufoundation.ca

Thursday, February 7, 2013

Differences and Similarities Between Fraud and Corruption

Fraud and corruption are two words that we hear too often. Both are on the rise worldwide, and their methods are evolving to adapt to the development of technology. Who among us did not receive at least one fraudulent email during the last month?

Is corruption a form of fraud? Or are these two different things? A review of the definition of the terms may offer an answer :

A handbook published by the World Bank Group (Fraud and Corruption Awareness Handbook Defines fraud and corruption as follows:

A fraudulent practice is any act or omission, including a misrepresentation, that knowingly or
Recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid
an obligation.”

“A corrupt practice is the offering, giving, receiving or soliciting, directly or indirectly, of anything of
value to influence improperly the actions of another party.”

An IIA Chicago Chapter presentation (Auditing for Corruption in Emerging Markets) provides the following explanation of the two terms:

Deriving undue benefit by bypassing some controls or bending some rules. Fraud Schemes are used to commit corrupt activities:

• Asset Misappropriation
• Financial statement irregularities
• Corruption

Takes place in the form of providing illicit benefits; harder to find; narrower scope than fraud.

• Bribery
• Embezzlement
• Extortion
• Influence Peddling
• Unlawful gratuity favor or commission
• Nepotism
• Illegal Political contribution

 The Business dictionary differentiates between these two terms as follows:
 Fraud is misrepresenting yourself or something as something you or it is not. For example, if you use a fake ID, you’re committing fraud by misrepresenting yourself as someone else.
Corruption is a broad term that can be applied to fraud, as well as other dishonest acts such as bribery, extortion, or embezzlement.
The two can be used in a wide array of instances but can apply specifically to business. Corporate leaders are often prosecuted for various fraudulent and corrupt acts, as well as political leaders.

Have you reached a conclusion yet? One thing we can, for sure, agree on: Fraud and Corruption are very bad practices and should be prevented and detected at an early stage.

Photo credit:Shutterstock

Are you getting the most from the ethics mandatory hours?

 Like many of you at this time of year, I have been looking to take the mandatory two hours of ethics training to comply with the IIA cpe  r...