Monday, 27 July 2015

The New IIA Mission Statement ,Core Principles and Courage!


 When the IPPF exposure draft was released during 2014, I wrote a post “IPPF Proposed Changes: A Real Change or A Cosmetic One?wondering if the changes will add real value. Now, that we have seen the changes, it is time to voice your opinion!

For those of you who have not had the chance to read the changes, here are the newly introduced topics:

Mission Statement:
To enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight.”
Core Principles
·         Demonstrates integrity.
·         Demonstrates competence and due professional care.
·         Is objective and free from undue influence (independent).
·         Aligns with the strategies, objectives, and risks of the organization.
·         Is appropriately positioned and adequately resourced.
·         Demonstrates quality and continuous improvement.
·         Communicates effectively.
·         Provides risk-based assurance.
·         Is insightful, proactive, and future-focused.
·         Promotes organizational improvement.
I really have no problem with any of the above; I think it added more clarity to the standards! I am only concerned that there was no explicit mention of courage anywhere in the changes, unless I have missed it somehow! It is my opinion that courage is the cornerstone of any effective and efficient internal audit activity. Without courage, the spirit of the mission statement and the core principles will not be achieved. I would have imagined that may be the outcome of recent and old corporate failures and scandals would be different, had there been courageous internal auditors reporting things as they are!
It is unproductive to ask internal auditors to be courageous without providing them with some sort of protection. I have wrote about this last April CAE: Does Courage Lead to A Career Suicide? I just wish that the IIA offers guidance on how to protect courageous internal auditors! 

These are my thoughts, please share yours!                  




 


 

Thursday, 23 July 2015

Random Sampling & the Colour Black!


During a recent travel through Ottawa airport, I was subjected not to one or two, but three "random" security checks! At the first check, I really thought it was random. By the second, I thought it was probably due to my Middle Eastern looks, although I don’t fit the age criteria! By the third, my audit skills started to kick in!

I tried to use my professional skepticism, statistical and analytical skills, in addition to root cause analysis to figure out why this has happened and how to avoid it in the future, if possible!

It did not take me long to realize that wearing black pants and black polo shirt did not help my case!That is of course in addition to my Middle Eastern decent and looks. The black clothing was not my choice, but rather my wife’s suggestion! To add insult to injury, my brand new pants kept showing a sign of metal object at the waistline when I was subjected to the full body scan machine. I will spare you the details of the inspections that followed.

On a good note, the security staff were super nice, super polite and incredibly efficient.

Lessons Learned:

·         There is no such thing as random checks at airports!

·         Never travel wearing all black clothing

·         Never travel wearing new untested clothes

  •    Security measures can be performed with respect and efficiency

·         I need a new fashion advisor!

In order to make this post useful, and not to limit it to a personal experience, let’s revisit some of the terminologies used:

Skepticism:

To quote Dr. Shermer: Skepticism is not a position; it's a process.

The popular misconception is that skeptics, or critical thinkers, are people who disbelieve things. And indeed, the common usage of the word skeptical supports this: "He was skeptical of the numbers in the spreadsheet", meaning he doubted their validity. To be skeptical, therefore, is to be negative about things and doubt or disbelieve them.

The true meaning of the word skepticism has nothing to do with doubt, disbelief, or negativity. Skepticism is the process of applying reason and critical thinking to determine validity. It's the process of finding a supported conclusion, not the justification of a preconceived conclusion.”

 
 Random Sampling:

Investopedia defines simple random sampling as follows:

A subset of a statistical population in which each member of the subset has an equal probability of being chosen. A simple random sample is meant to be an unbiased representation of a group. An example of a simple random sample would be a group of 25 employees chosen out of a hat from a company of 250 employees. In this case, the population is all 250 employees, and the sample is random because each employee has an equal chance of being chosen.”

Colour Black:

The color black relates to the hidden, the secretive and the unknown, and as a result it creates an air of mystery. It keeps things bottled up inside, hidden from the world. In color psychology this color gives protection from external emotional stress”

 

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