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1 Internal Auditing: One Professional’s Perspective Russell D. Price, CPA, CIA, CISA Sr. Audit Manager
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2 Agenda Introduction What is Internal Auditing? How to get started in Internal Auditing The IIA and You Ask questions at any time … don’t be shy!
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3 Introduction – Russell Price Current Assignment: Sr. Internal Audit Manager Intel experience: 7.5 years –Sr. Audit Manager – IT / Corporate Finance –S-Ox §404 IT Program Manager –Prior roles: eAP Program Manger; PARIS Program Manager Prior experience: 18 years –Big 4 Audit / IA / Business Consulting (Andersen, E&Y) – 6 years –Operations / Corporate / EMEA F&A (Tektronix) – 3 years –Operations Management / F&A (P&G, Frito-Lay) – 9 years Education / Certifications: –BSChE – Oregon State University –MBA – Portland State University –CPA – Washington, Oregon (reciprocity in progress) –CIA (Certified Internal Auditor) –CISA (Certified Information System Auditor)
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4 What is Internal Auditing?
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5 The IIA’s Definition of Internal Auditing Internal auditing is: An independent, objective assurance and consulting activity designed to add value and improve an organization’s operations It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
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6 Internal and External Audit Internal Auditors Integral to organization Ongoing monitoring and assessment Concerned with financial and non-financial risks Detection / prevention of fraud Future focus External Auditors Independent of the organization Annual opinion on financial statements / internal controls Concerned with financial risks Historical focus Different but Complementary Roles
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7 Cornerstones for Corporate Governance Internal audit provides assurance to management and the audit committee that risks are understood and managed properly.
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8 Key Responsibilities of Internal Auditors Function as one of the cornerstones of good governance Provide value-added services Evaluate the organizations risk management process Recommend process and controls improvements Perform consultative activities
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9 Impact of Enterprise Risk Approach Cash/Liquidity IP Policy Compliance BOD Practices Nat Disaster/Terrorism Technology (Operational) Supply Chain Volume Cost Pricing Product Roadmap Brand Market Intelligence Competition Human Capital Acquisition Integration F/R Compliance Local Laws/Restrictions Fraud/Other Misconduct Succession Planning Technology (Strategic) Customer Satisfaction Channel Capacity Avail. & Utilization Resources Reputation Product Liability Anti-Trust Compliance Tax Compliance FCPA Compliance Product Execution Partnerships Investment Divestiture Mgmt Restructuring Valuations & Estimates Foreign Currency Customer Credit Planning & Forecasting EHS Compliance Contract Compliance Privacy Compliance Market Concentration Network & IT Infra (Strategic) Inventory Manuf. Cost & Affordability Manuf. Start-up Cost Network & IT (Operational) Portfolio Management Spending None Impact Likelihood Product Qual. Audit Judged Demand Audit Digital Home CE POP Audit IMFT JV Audit Demand Forecast Apps Site Selection Process Audit HHG Divestiture & Supply Agree. Audit Design Tool Apps IT Governance
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10 The Profession of Internal Auditing Allows for an expedient, high-level understanding of the organization and industry Exposure to senior-level management Transferable skills/disciplines Networking opportunities Expanding profession Potential travel
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11 It’s A Great Time To Be An Internal Auditor Growing Profession … thanks to SOX! Not Just for Accountants Good Starting Salary and Upside Potential Great Opportunities High Visibility
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12 Internal Audit Salaries - 2006 Average total base compensation
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13 Public Accounting Salaries - 2006 Average total base compensation
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14 Attributes of a Successful Internal Auditor Demonstrates Objectivity and Integrity Strong Analytical / Fundamental Auditing Skills Creative, Inquisitive, Problem Solver Sound Business Acumen Good Negotiator / Influencer Active Listener, Exceptional Communicator Confident Intuitive
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15 How do I become an Internal Auditor? Take relevant courses in school Internships / entry-level programs Gain various types of experience –Public accounting –Private industry –Government Network at local Professional Associations (e.g. the IIA)
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16 The Institute of Internal Auditors (IIA) International Professional Association (www.theiia.org)www.theiia.org Established in 1941 Global Headquarters in Florida Over 125,000 members 165 countries and territories
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17 The IIA Vision The IIA will be the global voice of the internal audit profession: Advocating its value, promoting best practices, and providing exceptional service to its members The IIA’s Broad Objectives Acceptance of the internal auditing profession Increase internal auditing capacity Provide better services for our members
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18 Development of Standards and Guidance Internal Auditing Standards Board Exposure Draft Process Approval and Implementation Date Professional Issues Committee
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19 Certification Program Certified Internal Auditor Certified Government Auditing Professional Certification in Control Self-Assessment Certified Financial Services Auditor
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20 IIA Membership The IIA is an association of individual members All members commit to follow the IIA Code of Ethics and International Standards for the Professional Practice of Internal Auditing Members are served via local chapters or affiliates, or directly as members-at-large (where no chapter/affiliate exists)
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21 “What’s in it for Me?” Professional Guidance Advocacy Training Networking* Certification* Specialty Programs Technology Publications Services* Local Contacts And more…
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22 Audit Career Center Career Opportunities Online Resume Search Postings
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23 How Do I Join The IIA? In Canada, the Caribbean, or the United States join The IIA directly. Outside Canada, the Caribbean, or the United States join The IIA directly through an IIA affiliate in the local region
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