Interacting with Audit Committees The Way Forward for Internal Audit Dr. Larry E. Rittenberg, CIA, CPA Emeritus Professor, University of Wisconsin 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 on a monthly basis through 2016. 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 Audit Committees Audit committees are important in ensuring both the nature of internal audit work and internal audit independence. Audit committees, with internal audit reporting to audit committees, are being required around the world.

Mutual Relationships The audit committee is essential for building and supporting an independent internal audit function. In turn, internal audit must deliver high-level services to the audit committee and the organization to sustain the needed level of support.

Key CBOK Questions Does your organization have an audit committee (or equivalent)? How often do you meet with the audit committee (per year)? Do you have formal meetings without members of management present (executive sessions with audit committee members only)?

Increase but Wide Disparity Across Regions The existence of audit committees in North America is strong. European regions tend to have supervisory boards that often do not have an audit committee. Legislation is being developed in parts of Asia to implement audit committees to enhance corporate governance.

Audit Committee Existence by Sector Audit committee rates are high for publicly traded companies and companies in the financial sector. The public sector/government shows the most growth in audit committees between 2010 and 2015.

Audit Committee Meetings Countries with emerging audit committees tend to meet more often, but usually for shorter time periods. The emphasis is on more frequent monitoring. Mature audit committees meet less often and rely on controls and internal audit to assist their monitoring mission.

Meetings without Management Present These are often referred to as “executive sessions.” These sessions are designed to assure the audit committee that all important issues are discussed in confidence.

Key Themes: Going Forward Good progress, but there are too many organizations without effective audit committees. Frequency of meetings varies significantly by geographic region and industry. Meet less frequently as audit committees mature.

Key Themes: Going Forward Executive sessions have increased, but there are substantial differences across regions and industries. Some is cultural, but there is a need to increase. “Executive sessions between the CAE and the audit committee is also low for most Asian countries. Interviewees explained that many parts of Asia have a culture where executive management tends to have more power and provide fewer opportunities for questioning and oversight.” (p. 10)

Key Themes: Going Forward Boundaries for management and internal audit are changing: Organizations are moving rapidly. Internal audit needs to understand not only current needs, but future needs for assurance. Internal audit must fundamentally understand the business.

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 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 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 Integrated Reporting 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

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