1. Relationships and Risk
Insights from Stakeholders

2. Agenda CBOK Stakeholder Study
Primer on “Critical Non-Technical Skills”

3. About the Stakeholder Study
13 Languages
Global Interviews
100+
IIA
Institute
Partners 23
Global Surveys
1,124
The purpose of the Common Body of Knowledge (CBOK) 2015 stakeholder study is to gain a better understanding of global stakeholders’ expectations with regard to internal audit’s purpose, function, and performance.
This study was developed in partnership between The IIA Research Foundation and Protiviti.

4. Internal audit does many things well that could be considered foundational elements of assurance work.
There are opportunities for internal audit to add value to their organizations by spending more time focusing on risk identification and management in addition to assurance work.
General Themes
Internal audit should focus more on strategic risks, but exactly what the stakeholders mean by that is less than clear or consistent.
Increased demands on internal audit will require CAEs to prioritize competing demands. Managing these conflicts requires strong relationship and communication skills.

5. Stakeholders Give Internal Audit High Marks on Foundational Elements

6. High Ratings in Foundational Elements
More than 70%...
More than 80%...
Top three criteria used to evaluate the performance of internal auditors:
Stakeholders agree or strongly agree that internal auditors:
Assess areas or topics that are significant.
Keep up to date with changes in the business.
Sufficiently communicate audit plans.

7. Expectations to Move Beyond the Basics

8. The clear answer is “risk”
Beyond Assurance
Many respondents note that they see value in advisory services. What should this non-assurance work cover?
The clear answer is “risk”

9. Focus on the Right Risks

10. A Paradox of Structural Expectations
Do you believe IA should be more active with assessing strategic risk?
How?
Focus on strategic risks as well as operational, financial, and compliance risks during audit projects.
Periodically evaluate and communicate key risks to the board and executive management.

11. A Paradox of Structural Expectations
Valued
Expected

12. Manage Competing Demands

13. Strategies for Prioritizing Competing Demands

14. Key Report Takeaways Preserve the foundational elements
Explore adding more advisory work
Focus on risk activities
Demonstrate understanding of strategic risks
Build your soft skills

15. From “Soft Skills” to “Critical Non-Technical Skills”: Some Social Science Behind Auditing

16. Circle of Trust & Cooperation: In Group – Out Group Dynamics

17. Circle of Trust & Cooperation: In Group – Out Group Dynamics

18. In Group – Out Group Dynamics
In-group favoritism
A preference and affinity for one's in-group over the out-group or anyone viewed as outside the in-group.
Expressed in evaluation of others, allocation of resources, and many other ways.
A key notion in understanding in-group/out-group biases is determining the psychological mechanism that drives the bias. One of the key determinants of group biases is the need to improve self-esteem.
Individuals will find a reason, no matter how insignificant, to prove to themselves why their group is superior.
Source: Boundless. “In-Groups and Out-Groups.” Boundless Sociology. Boundless, 08 Jan Retrieved 13 May from

19. In Group – Out Group Dynamics
Intergroup aggression
Any behavior intended to ‘harm’ another person because he or she is a member of an out group.
A by product of in-group bias, in that if the beliefs of the in-group are challenged or if the in-group feels threatened, then they will express aggression toward the out-group.
The major motive for intergroup aggression is the perception of conflicting interests between in-group and out-group.
The way the aggression is justified is through dehumanizing the out-group, because the more the out-group is dehumanized the "less they deserve the humane treatment enjoined by universal norms. "
Source: Boundless. “In-Groups and Out-Groups.” Boundless Sociology. Boundless, 08 Jan Retrieved 13 May from

20. Beware the “Super Chicken”

21. Mind Your Self Importance
“Every act of conscious learning requires the willingness to suffer an injury to one’s self esteem. That is why young children, before they are aware of their self importance, learn so quickly.” Thomas Szasz

22. Build Strong Professional Relationships Based on Integrity and Trust
Do what you know is right even in difficult times
Involve others in your business
Understand others business
Trustworthy = Honesty + Competence + Reliability
Don’t hide behind independence
Source: Lessons Learned on the Audit Trail by Richard Chambers, IIA President and CEO
Know successful: people are asking for your advice,

23. The 3 Stages of Auditor Self Awareness
You might be wrong
No!
You might be wrong
Maybe
I might be wrong IA IA IA

24. Beware of Logical Fallacies
“Most of us illogically believe that we are logical thinkers”
Jason Silva

25. Logical Fallacies
Source:

26. Provide a range in which the correct answer falls:
Distance between the Earth and Venus
(in miles)
Average number of bees in a hive
Population of Mauritius

27. Which way is the bus going?

28. Exploratory vs. Explanatory
Finding the two pearls amongst one hundred oysters.
Storytelling with Data: A Data Visualization Guide for Business Professionals
Cole Nussbaumer Knaflic

29. Building the Value Proposition for Your Audit
Define
Your mission
Internal Auditing
Align
Audit objectives
Business objectives
Explain
Your purpose
Audit process
What’s in it for management
Understand
Management’s expectations
Attitude toward being audited
Collaborate
Assessment of risks and controls
Root cause analysis
Action plans

30. Question Jim Pelletier, CIA, CGAP
Vice President, Professional Solutions