IIA North American Board Chairman Perspective February 2, 2016 Mike Joyce, CIA, CPA, CRMA, CLU, FAHM Chief Auditor & Compliance Officer Blue Cross Blue Shield Association Chairman, IIA North American Board

Agenda Personal Introduction IIA Mission & Strategic Direction IIA’s Global Footprint IIA North America BCBSA Audit Perspective NA Chairman’s Theme Discussion – “Make Your Mark”

My Background/BCBSA Audit Environment Internal Auditor Since 1983 IIA Volunteer Since 1989 BCBSA Chief Auditor Since 1999 BCBSA Structure /1,000+ employees Report directly to CEO and Finance & Audit Committee Two offices - shared files on WAN Staff size 21 – only 7 Audit Professionals; remainder represents anti-fraud and compliance staff Avg audit reports issued per year

About The IIA The internal audit profession’s most widely recognized advocate, educator, and provider of standards, guidance, and certifications. Established in 1941, The IIA today serves more than 180,000 members from 190 countries.

Membership by Regions *April 2015 Membership Data RegionMembership Africa14,054 Asia/Pacific31,377 Central/South America13,173 Europe49,141 Middle East6,304 North America69,521 Members at Large942 World Wide Total188,821

Certifications: History of the Exams Certified Internal Auditor (CIA) exam first introduced in 1974 Certification in Control Self Assessment (CCSA) in 1999 Certified Financial Services Auditor (CFSA) in 2002 Certified Government Auditing Professional (CGAP) in 2000 Certification in Risk Management Assurance (CRMA) in 2011

Certifications & Qualifications Pathways IIA Global Certification Statistics 124,229 13,886 6,438 6,079 3,608

Globally Advocating Good Governance, Risk Management and Control FOUR PRINCIPLES 1.Strong and Effective Audit Committee 2.Clear Accountability of Risk Management and Control 3.Properly Structured, Operate in Compliance with Standards 4.Reporting Lines for CAE Enhance Organizational Independence.

The IIA’s Mission To lead the Global profession and advance its value by: –Promulgating global standards and guidance –Developing and delivering global certifications and qualifications –Offering professional educational and development opportunities –Researching, disseminating and promoting best practices in internal auditing –Advocating and promoting internal audit’s value to key stakeholders

Global Partnerships Efforts to broaden the business world’s understanding of internal auditing: International Federation of Accountants (IFAC) Financial Stability Board (FSB) International Integrated Reporting Council (IIRC) Regulators/Listing Organizations US Congress/Regulators Organization for Economic Cooperation and Development (OECD) International Organization of Supreme Audit Institutions (INTOSAI) Association of Chartered Certified Accountants (ACCA) Information Systems Audit and Control Association (ISACA) Global Reporting Initiative (GRI) International Organization of Security Commissions (IOSCO)

Global Perspective The IIA’s Core Purpose To lead the Global profession and advance its value. The IIA’s Vision Internal audit professionals will be universally recognized as indispensible to effective governance, risk management, and control.

IIA Core Values Collaboration Courage Unity in Diversity Global Mindset Innovation Integrity Service Excellence Respect Professionalism

IIA Global Strategic Plan - Goals Professionalism The IIA will lead the profession through the development of timely and relevant knowledge, global guidance, and career paths. Advocacy The IIA will have raised the profile of and demand for the profession to ensure it is recognized as an indispensable resource by key stakeholders. Leading Voice The IIA will be recognized as the leading voice for internal auditing. Capacity The IIA will collaborate globally to enhance the capacity of the profession. Sustainable Value The IIA will deploy both financial and business models that generate sustainable value for members.

More than 180,000 Members in 190 Countries BOARD OF DIRECTORS Executive Committee NA Directors Institute Directors Directors at Large Chairman, Audit Committee IIA President & CEO GLOBAL NOMINATING COMMITTEE Audit Committee IIA Research Foundation The Executive Committee Chairman of the Board Senior Vice Chairman Vice Chairmen (5)* Past Chairmen (2) IPPF Oversight Council Global Council 14 Global Committees Via EC VCs The North American Board The IIA’s Global Governance Structure

NORTH AMERICAN VOLUNTEER ORGANIZATION The Institute of Internal Auditors More than 75,000 Members and more than 160 Chapters in US, Canada, Caribbean, Guyana & Bermuda CANADIAN BOARD CANADIAN BOARD NA BOARD OFFICERS (6) Chairman, North American Board Senior Vice Chairman Vice Chairman - Content Vice Chairman - Member Services Vice Chairman - Professional Development Vice Chairman – Specialty Groups Vice Chairman-Finance NORTH AMERICAN BOARD (recommended composition) 3 members from 5 largest chapters 1 member – Canada (if not included above) 5 members-at-large 1 Past Chairman NAB 1 Executive Committee Representative 1 IIA President – non-voting VICE CHAIRMAN – MEMBER SERVICES Chapter Relations NA NOMINATING COMMITTEE VICE CHAIRMAN – PROFESSIONAL DEVELOPMENT Learning Solutions Regional Conference SENIOR VICE CHAIRMAN NA Advocacy Committee SENIOR VICE CHAIRMAN NA Advocacy Committee VICE CHAIRMAN – FINANCE Global Finance Committee VICE CHAIRMAN – SPECIALTY GROUPS Audit Executive Center ACGA/Government Center Financial Services Center Environmental, Health & Safety Center VICE CHAIRMAN – CONTENT Publications Advisory Committee VICE CHAIRMAN – CONTENT Publications Advisory Committee

What Does North American Board Do? Represent North American interests at global level Oversees budget/dues for NA members Provides guidance for NA training programs Provides support to NA Chapters

North American Strategic Plan Goal A. Professionalism: The IIA, at all levels, will collaborate to enhance the profession in North America. Goal B. Advocacy: The IIA will raise the profile of and demand for the profession, enhancing its recognition as indispensable to good governance by key stakeholders. Goal C. Sustainable Value: The IIA will generate sustainable value for members. Goal D. IIA as Leader: The IIA will emerge as the leading voice in integrated audit, governance, risk management assurance and control.

Enhance the Member Experience –Member Portal & Young Professionals Initiative –Career Map & Self-directed Learning –Knowledge & Insights: CBOK Deliver Targeted Member Solutions –Audit Group Concierge Services –Industry & Specialty Centers –Peer collaboration opportunities Strengthen Chapter Support –Chapter Technology Suite –Community Portal –Chapter and Academic Programming IIA North American Priorities in 2016

19 Existing In Process Future Opportunities Information Technology Colleges & Universities Health Services Gaming & Hospitality Others C ANADIAN P UBLIC S ECTOR A UDITING C ENTRE Specialty Centers & Resource Exchanges: Targeted Solutions & Resources

BCBSA Internal Audit Includes IT Audit Unit / Operational Audit Unit Use of graphics to describe the control environment in audit reports Use of a COSO matrix in audit reports All auditors participate in the annual Risk Assessment process Provide Training to BCBS Licensees –Directors & Managers Roundtables –National Summit –New Internal Auditor Training Program –QAR manual and templates - based on the IIA guidelines

Knowledge & Insights Q: What is your organization's level of development for its risk management processes? (CAEs only) Q: For information technology (IT) security in particular, what is the extent of the activity for your internal audit department related to the following areas? Source: 2015 CBOK Practitioner Study, The IIA Research Foundation

Hot BCBSA Risks Cybersecurity Regulatory/Government Compliance Data Management/Governance Attracting & retaining top talent

NA Board Chairman’s Theme – “Make Your Mark” June 2015 Ia Magazine Article – All internal auditors have the opportunity to “Make Their Mark”: –In the organization –In the profession –In the community

QUESTIONS? Mike Joyce Chief Auditor & Compliance Officer Blue Cross Blue Shield Association,

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