1. QUALITY ASSURANCE AND IMPROVEMENT PROGRAM
Hans Nieuwlands CIA CGAP CCSA
CEO IIA Netherlands
Yerevan, May 15, 2014

2. Outline Introduction Definition of Quality Guidance from The IIA
QAIP Framework
Value of a QAIP
Conclusion
The International Standards for the Professional Practice of Internal Auditing support this definition of internal auditing.
QAIP - Yerevan, May 15, 2014

3. Quality is not an act, it is a habit.
What is Quality?
Quality is not an act, it is a habit.
Aristotle
The International Standards for the Professional Practice of Internal Auditing support this definition of internal auditing.
QAIP - Yerevan, May 15, 2014

4. Quality means doing it right when nobody is watching.
What is Quality?
Quality means doing it right when nobody is watching.
Henry Ford
The International Standards for the Professional Practice of Internal Auditing support this definition of internal auditing.
QAIP - Yerevan, May 15, 2014

5. What is Quality?
Quality in a product or service is not what the supplier puts in.
It is what the customer gets out and is willing to pay for.
Peter F. Drucker
The International Standards for the Professional Practice of Internal Auditing support this definition of internal auditing.
QAIP - Yerevan, May 15, 2014

6. What is Quality?
Quality in internal audit is guided by both an obligation to meet customer expectations as well as professional responsibilities inherent in conforming to the Standards.
The International Standards for the Professional Practice of Internal Auditing support this definition of internal auditing.
Practice Guide
QAIP - Yerevan, May 15, 2014

7. Professional Guidance
The International Standards for the Professional Practice of Internal Auditing support this definition of internal auditing.
QAIP - Yerevan, May 15, 2014

8. Standards 1300 – Quality Assurance and Improvement Program
The chief audit executive must develop and maintain a quality assurance and improvement program that covers all aspects of the internal audit activity.
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

9. Standards Interpretation 1300:
A quality assurance and improvement program is designed to enable an evaluation of the internal audit activity’s conformance with the Definition of Internal Auditing and the Standards and an evaluation of whether internal auditors apply the Code of Ethics.
The program also assesses the efficiency and effectiveness of the internal audit activity and identifies opportunities for improvement.
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

10. Standards
1310 – Requirements of the Quality Assurance and Improvement Program
The quality assurance and improvement program must include both internal and external assessments.

11. Standards 1311 – Internal Assessments
Internal assessments must include:
Ongoing monitoring of the performance of the internal audit activity; and
Periodic self-assessments or assessments by other persons within the organization with sufficient knowledge of internal audit practices.
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

12. Standards Interpretation 1311:
Ongoing monitoring is an integral part of the day-to-day supervision, review, and measurement of the internal audit activity.
Ongoing monitoring is incorporated into the routine policies and practices used to manage the internal audit activity and uses processes, tools, and information considered necessary to evaluate conformance with the Definition of Internal Auditing, the Code of Ethics, and the Standards…
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

13. Standards
1320 – Reporting on the Quality Assurance and Improvement Program
The chief audit executive must communicate the results of the quality assurance and improvement program to senior management and the board.
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

14. Practice Guides
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

15. QAIP Framework
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

16. QAIP Components
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

17. Continuous improvement

18. Assessments Standard 1311 – Internal Assessments Standard 1312
– External Assessments
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

19. QAIP Assessment

20. The Value of a QAIP

21. The Value of a QAIP 1.006 respondents in 46 countries
60% have a QAIP or will implement one within 12 months
69% of this group conducted an external assessment

22. Value to the organization (1)
QAIPs add value to the organization
Increasing management’s understanding of risk (about 80%)
Providing better information for decision-making (70%)
Supporting implementation of the organization’s strategy (65%)

23. Value to the organization (2)
QAIPs add value to the organization
Identifying cost savings (61%)
Decreasing fraud acts (62%)
Promoting coordination with other assurance providers (57%)

24. Value to the IAF (1)
Identifying critical areas and points for improvement (83%)
Documenting and evaluating the performance of critical processes (76%)
Enhancing internal auditors’ professionalism and specialized skills (75%)

25. Value to the IAF (2) Value of benchmarking:
Assessment of maturity against peer audit groups.
The outside world facilitates changes better
Increase of credibility
Avoid self-satisfaction

26. Obstacles to establish a QAIP
Financial cost (54%)
Lack of supervisory staff (51%)
Bureaucratization (44%)
Increase of paper workload (41%)
Too theoretical (21%)

27. Feedback on External Assessments
Paying others to tell us what we already know.
Too much focus on Standards compliance, rather than disseminating best practice.
Lack of practical insights, skills or knowledge of the review team.

28. Key factors for a successful QAIP
Involvement of Governing bodies (58%)
Support from Executive management (73%)
Internal auditors’ involvement and motivation (92%)
CAE Leadership (96%)

29. Communicating Results of a QAIP
Specific report to the Board (62%)
Specific report to Executive management (56%)
Include in annual report (36%)
To external auditor (31%)

30. What is next?
Promote the QAIP as a source of value added to the organization
Develop a cost benefit justification
Integrate ongoing monitoring activities in the daily operations
Show leadership and motivate staff

31. Resources

32. Conclusion
Any thoughts?