Available free of charge: CAE Career Paths Characteristics and Competencies of Today’s Internal Audit Leaders Venkataraman Iyer PhD, CPA The IIARF encourages those who are presenting this slideshow to download the full report from The IIA Research Foundation and make it available to their audience. Available free of charge: www.theiia.org/goto/CBOK

CBOK 2015 Practitioner Study CBOK is the Global Internal Audit Common Body of Knowledge: The global practitioner survey is the largest ongoing study of internal audit professionals in the world. More than 25 free reports about practitioners and the profession will be released beginning July 2015. Download free reports from the CBOK Resource Exchange at The IIA website at any time (www.theiia.org/goto/CBOK).

CBOK 2015 Practitioner Survey Practitioner Survey Results Survey completed April 1, 2015 14,518 usable survey responses Participation Levels 100% representation from IIA institutes Responses from 166 countries 23 languages

CBOK 2015 Practitioner Study Global Regions are based on World Bank Categories. Percentages are the percentage of total survey responses from that region compared to all survey responses. North America: 19% Latin America & Caribbean: 14% Middle East & North Africa: 8% Sub-Saharan Africa: 6% Europe & Central Asia: 23% South Asia: 5% East Asia & Pacific: 25%

CBOK 2015 Practitioner Study The speaker does not necessarily need to say this, but it’s important to remember that each pie chart is based only on those who answered that particular question (in other words, not all 14,518 survey respondents provided an answer to every question.) Below are the specific number of responses for each question shown on the slide. Age was obtained from 12,780 respondents; Organization Type was obtained from 13,032 respondents; Gender was obtained from 14,357 respondents; Staff Level was obtained from 12,716 respondents. Age was obtained from 12,780 respondents; Organization Type was obtained from 13,032 respondents; Gender was obtained from 14,357 respondents; Staff Level was obtained from 12,716 respondents.

Importance of CAEs They provide leadership to the internal audit function. They are the link between the internal audit function and top management. Their role is expanding. They project the tone at the top.  CAEs are assuming, in addition to their traditional internal audit, either primary or shared responsibilities for the organization’s formal risk management function and its compliance activities.

CAE Career Insights Highlights the demographics of CAEs worldwide. Provides a benchmark for comparison. Shows qualifications, experience, and soft skills that, in general, are needed to become a CAE. Data from prior CBOK surveys are compared, wherever possible, to the current results so that any meaningful trend can be observed.

Demographics Median age of the CAEs surveyed in 2015 is between 40 and 49, and more than two-thirds of CAEs are male. Average age of CAEs in North America is significantly higher compared to CAEs in other regions. Internal auditing developed early in North America, has a complete and mature system in different organization. So they need many years to be promoted as CAE from staff.

Gender The proportion of female CAEs worldwide increased from 28% in 2010 to 31% in 2015. Highest percentage of male CAEs: South Asia (93%) Middle East & North Africa (92%) The highest percentage of female CAEs: North America (39%) Europe (36%) The percentage of female CAEs is significantly higher in public sector and not-for-profit organizations (38%) compared to other types of organizations.

Education Almost all CAEs (94%) hold at least a bachelor’s degree. More than half (64%) majored in accounting, followed by internal auditing (44%) and business (43%).

Experience CAEs report higher levels of experience in 2015 compared to 2010 and 2006 CBOK studies. Average internal audit experience of a CAE (13.4 years): 6.8 as CAE 2.1 as director 1.6 as manager 2.9 as staff member About 62 percent of CAEs in the 2010 survey reported having experience of less than 6 years as a CAE compared to the average experience level of 6.8 years as a CAE in the current survey.

Regional Differences in Experience

Certification Two-thirds of North American CAEs are certified, which is significantly higher than other regions. Increase in CAEs with internal audit certification: 41% in 2006 to 53% in 2015 In general, obtaining an internal audit certification (any type) increases the chance of becoming a CAE. This is true for all regions, all types of industries, and for both males and females.

Internal Audit Certifications of CAEs More than one half of CAEs (55%) in North America have obtained the CIA certification.

Competencies of CAEs CAEs report an advanced level of competency in their self-assessment against 10 core competencies published by The IIA. CAEs scored significantly higher in all domains compared to non-CAEs.

Competency Self-Assessments of CAEs

Training CAEs spend a significant amount of time in training – 46.1 hours each year. This is similar to the amount of training received by internal auditors at other experience levels and job titles. Mentoring is essential for junior auditors to climb the career ladder. Vision University is the IIA's premier chief audit executive development program. The IIA has developed the Qualification in Internal Audit Leadership (QIAL) for internal auditors to build and enhance their skills to establish their credibility as a leader of the future.

How Do You Develop the Skills and Experiences of Your Senior Staff? Use executives outside internal audit to mentor or coach. Provide the audit staff with opportunities to gain exposure to the audit committee. Grant senior staff with broader audit responsibilities so they can see more of the organization.

How Do You Develop the Skills and Experiences of Your Senior Staff? Provide senior staff with opportunities to serve on committees or task forces that deal with broader issues outside of internal audit. Create new or temporary titles that position possible candidates for broader responsibilities. Have a succession plan and share it with the audit committee.

Characteristics and Skills Needed to Become a CAE Understanding of Business and Risks Leadership and Ethics Strategic Thinking Critical Thinking Breadth of Knowledge Executive Presence Excellent Communication

How Does One Become a Successful CAE? Requirements vary across regions and types and size of the organizations. Education, experience, and certification are important but do not necessarily qualify someone to be a CAE. Soft skills such as strong leadership, critical thinking, and communicating effectively are critical.

Role of Organizations Identify and groom potential CAEs. Have a succession plan. Provide relevant training, including mentorship.

CBOK 2015 Releases Jul. 2015 Aug. 2015 Sept. 2015 Oct. 2015 Nov. 2015 IIA International Conference Governance, Risk, and Control Conference South Africa Conference IIA Financial Services Exchange ECIIA Conference All Star Conference Southern Regional Conference ACIIA Conference IIA Midyear Committee Meetings Jul. 2015 Aug. 2015 Sept. 2015 Oct. 2015 Nov. 2015 Dec. 2015 Driving Success in a Changing World: 10 Imperatives for Internal Audit Navigating Technology’s Top 10 Risks: Internal Audit’s Role Staying a Step Ahead: Internal Audit’s Use of Technology A Global View of Financial Services Audits: Challenges, Opportunities, and the Future Who Owns Risk? A Look at Internal Audit’s Changing Role Combined Assurance: One Language, One Voice, One View Responding to Fraud: Exploring Where Internal Auditing Stands Auditing the Public Sector: Managing Expectations, Delivering Results Delivering on the Promise: Measuring Internal Audit Value and Performance Mapping Your Career: Competencies Necessary for Internal Audit Excellence Please share information about the publication of upcoming CBOK reports and where to go for the free download.

CBOK 2016 Releases GAM Conference SoPac Conference Leadership Conference IIA International Conference Jan. 2016 Feb. 2016 Mar. 2016 Apr. 2016 May 2016 Jun. 2016 Engaging Third Parties for Internal Audit Activities: Strategies for Successful Relationships Interacting with Audit Committees: The Way Forward for Internal Audit CAE Career Path: Characteristics and Competencies of Today’s Internal Audit Leaders GREAT Ways to Motivate Your Staff Maturity Levels for Internal Audit Departments Around the World The Skills Most Desired by IA Managers for Their Staffs Certifications Held by Internal Auditors Ethical Pressures Faced by Internal Auditors IIA Standards: Conformance and Trends Quality Assurance and Improvement Program Trends Regional Reflections: Africa Organizational Governance: Internal Audit's Role Women in IA: Representation and Trends Additional reports that will be available for a free download..

YOUR DONATION DOLLARS AT WORK FREE thanks to generous contributions from individuals, organizations, IIA chapters, and IIA institutes around the world. Download your FREE copy today at the CBOK Resource Exchange. www.theiia.org/goto/CBOK This report was generously sponsored by: The IIARF encourages those who are presenting this slideshow to download the full report from The IIA Research Foundation and make it available to their audience.

About The IIA Research Foundation CBOK is administered through The IIA Research Foundation (IIARF), which has provided groundbreaking research for the internal audit profession for nearly four decades. Through initiatives that explore current issues, emerging trends, and future needs, The IIARF has been a driving force behind the evolution and advancement of the profession. For more information, visit: www.theiia.org/Research

Copyright and Disclaimer The IIARF publishes this document for information and educational purposes only. IIARF does not provide legal or accounting advice and makes no warranty as to any legal or accounting results through its publication of this document. When legal or accounting issues arise, professional assistance should be sought and retained. Copyright © 2016 by The Institute of Internal Auditors Research Foundation (IIARF). All rights reserved. For permission to reproduce or quote, please contact research@theiia.org.