1. Capacitate Internal Audit
Different Approaches to
Capacitate Internal Audit
Xolani Ndlovana
10 April 2019

2. Importance of Internal Audit
TOPICS
Importance of Internal Audit
Governance Framework
Pillars and Strategic Activities
Resourcing the Internal Audit
Considerations and Recommendations
Q&A

3. IMPORTANCE OF INTERNAL AUDIT
Cornerstone of Good Corporate governance,
Bridges the gap between management and the board (council),
Assesses the ethical climate and the effectiveness and efficiency of operations,
Compliance with rules, regulations, and overall best business practices.

4. GOVERNANCE FRAMEWORK
Internal audit is an essential component of a good governance framework for all councils.
Councils must strive to ensure there is a risk management culture.
An effective AC and IA function - assurance that risk management is working effectively
Management has primary responsibility for the design and operation of the risk management and internal control frameworks

5. PILLARS AND STRATEGIC ACTIVITIES
Enhancing skills development through coaching and mentoring
Promoting professional qualifications
Building the capacity of internal auditors to audit in a computerized environment

6. PILLARS AND STRATEGIC ACTIVITIES
Rebalancing internal audit effort
Automating audit process to enhance audit efficiency
Strengthening capacity to deal with stakeholders effectively

7. PILLARS AND STRATEGIC ACTIVITIES
Increase internal audit visibility and integration in public governance
Networking and Knowledge Sharing
Attracting the next generation of talent to deliver smarter results.

8. PILLARS AND STRATEGIC ACTIVITIES
Develop and implement quality assurance program
Provide consulting services and develop tools to improve risk management and internal control systems
Benchmark internal audit to regional governments with leading internal audit practices - Conduct study tours to understudy best practices in other countries

9. OPTIONS FOR RESOURCING INTERNAL AUDIT
Regardless of size, councils are encouraged to have an appropriately resourced internal audit function.
Resources to carry out its work, including skilled auditors, appropriate technology tools, budgets and continuous professional development opportunities.

10. OPTIONS FOR RESOURCING INTERNAL AUDIT
In-house
Outsourced
Co-sourced
Maintain independence and objectivity
Have clear roles and responsibilities

11. OPTIONS FOR RESOURCING INTERNAL AUDIT
In-house - employed by organizations to perform the internal auditing activity.
Co-sourced—provided by a combination of internal staff and an external service provider or providers, and managed within the department.
Outsourced—provided by an external service provider contracted to deliver a range of internal audit services.
Councils are also encouraged to consider resourcing their internal audit function via collaborative arrangements with other councils or through a regional organisation of councils (ROC).

12. CONSIDERATIONS & RECOMMENDATIONS
AUTOMATION OF INTERNAL AUDIT
QUALITY ASSURANCE
PARTNERING WITH MANAGEMENT
Artificial Intelligence
Data Analytics & Robotics
Continuous Audits
Beyond Sampling
Municipalities are still expected to conduct independent external quality assessments
The benefits are massive = Conformance to ISPPIAs and IPPF
Partner more with management to help correct problems and improve processes in real time, instead of highlighting problems after they occur. Be more relevant and add more value as a trusted advisor.

13. CONSIDERATIONS & RECOMMENDATIONS
INTEGRATION
INSIGHT
ADVOCACY
ALIGNMENT
Internal audit should avoid being an independent island and become an integrated part of the municipal processes, participating more with first (Management) and second (Risk Management & Compliance) line functions.
A forward-Looking Mindset: King IV outlines that Internal Audit provides value by contributing insight into the activities of the organisation and, as a further enhancement, foresight.
This is further highlighted under ISPPIA 2100 – Nature of Work
Internal Auditors must provide more advocacy and education to the various stakeholders within and outside municipalities, to deal with misconceptions about the work of internal auditors.
Take advantage of the International Internal Audit Awareness Month (May each year). Resources on /na.theiia.org/ website
Align the work of internal audit to the mission, vision, values, and objectives of the organization. Also, ensure alignment with enterprise risk management and other second line functions. Internal audit must focus attention on risk-based audits and define risks broadly, including strategic and emerging risks.

14. END Your super corporate governance Xolani Ndlovana
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