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Internal Audit Process
Credit Union Internal Auditing from the Ground Up John Gallagher, Director Internal Audit SEFCU (New York) Barry Lucas, Internal Auditor Desco FCU (Ohio) Pat Richey, Director Internal Audit Finance Center FCU (Indiana) ACUIA Conference 6/14/2011
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Serving Many Masters Internal Audit Definition
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. ACUIA Conference 6/14/2011
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Serving Many Masters Role Independence and Objectivity
Assurance and Consulting Add Value and Improve Services Systematic and Disciplined Reporting Structure ACUIA Conference 6/14/2011
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SEFCU Organizational Chart
Board of Directors (13 members) Supervisory Committee (4 Members) Board Committees (ALCO, Governance, CEO Compensation) President/CEO Internal Audit Chief Administrative Officer Chief Financial Officer Chief Banking Officer Chief Marketing Officer President Commercial Services Chief Technology Officer CUSOs ORM HR Accounting Finance Collections Ops Support Branch Network Call Center Marketing e-Services CRM Commercial Lending Business Accounts IT Facilities Lending Members
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ACUIA Conference 6/14/2011
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ACUIA Conference 6/14/2011
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Serving Many Masters Responsibilities Internal Audit Charter
Supervisory/Audit Committee Charter Job Descriptions Audit Staff Structure ACUIA Conference 6/14/2011
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Serving Many Masters Relationships and Politics Management Employees
ACUIA Conference 6/14/2011
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Serving Many Masters Relationships Supervisory & Audit Committees
Board of Directors ACUIA Conference 6/14/2011
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Serving Many Masters Relationships External Auditors Regulators
ACUIA Conference 6/14/2011
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Serving Many Masters QUESTIONS ? ACUIA Conference 6/14/2011
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Performing Audit Work Risk Assessment Audit Universe Models
Where Do I Start? Risk Assessment Audit Universe Models Risk Priority ACUIA Conference 6/14/2011
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Performing Audit Work Where Do I Start? Business/Audit Plan
ACUIA Conference 6/14/2011
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Performing Audit Work Where Do I Start? Audit Scheduling Distractions
Fraud Investigation New Products / Services Training / Vacations Turn over ACUIA Conference 6/14/2011
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Performing Audit Work Objectives - broad statements - risks Scope
- who - what - when - where ACUIA Conference 6/14/2011
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Performing Audit Work Audit Program - written procedures
- interview questions - collecting information - testing, sampling - analyzing - evaluation ACUIA Conference 6/14/2011
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Performing Audit Work Workpapers - support findings
- restricted access - retention - testing, sampling - analyzing - evaluation ACUIA Conference 6/14/2011
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Performing Audit Work QUESTIONS ? ACUIA Conference 6/14/2011
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Communications and Follow Up
Audit Reports Management & Internal Audit need to agree up front Findings Recommendations Report Structure Who gets them? ACUIA Conference 6/14/2011
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Communications and Follow-Up
Follow-up Audits Monitoring results Implementation of recommendations If you do not do this – Nothing happens! ACUIA Conference 6/14/2011
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Communications and Follow-Up
Supervisory / Audit Committee Meetings Frequency Structure Agenda ACUIA Conference 6/14/2011
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Communications and Follow-Up
QUESTIONS ? ACUIA Conference 6/14/2011
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Tools and Resources Technology Paperless auditing Internet tools
Analytical review using audit software ACUIA Conference 6/14/2011
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Tools and Resources Basic Internal Controls - COSO
Credit Union Objectives - Operations - Financial Reporting - Compliance Internal Control Components - Control Environment - Risk Assessment - Control Activities - Information and Communication - Monitoring ACUIA Conference 6/14/2011
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Tools and Resources Enterprise Risk Mgmt - COSO
Credit Union Objectives - Operations - Financial Reporting - Compliance - Strategic ERM Components - Internal Environment - Objective Setting - Event Identification - Risk Assessment - Risk Response - Control Activities - Information and Communication - Monitoring ACUIA Conference 6/14/2011
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Tools and Resources International Standards for the Professional Practice of Internal Auditing - Attribute Standards - Performance Standards - Quality Assurance Review ACUIA Conference 6/14/2011
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Tools and Resources Control Self-Assessment Management Buy In
Business Objectives Identify Risks Gather Best Practices Provide Documents ACUIA Conference 6/14/2011
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Tools and Resources Resources Professional Journals - IIA, ACFE, ISACA
Professional Standards - COBIT - GTAGs Current Issues of Internal Auditing – Governance Websites - Credit union industry, regulatory, professional ACUIA Conference 6/14/2011
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Audit Professionalism
Certification - CIA – Common Body of Knowledge - CFE - CUCE, NCCO - CISA - CPA - CFSA ACUIA Conference 6/14/2011
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Audit Professionalism
Training - Conferences / Seminars - Local Chapters - Webinars / Teleseminars - Compliance Schools ACUIA Conference 6/14/2011
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Audit Professionalism
ACUIA Website Message Forum Membership Directory Audit Guide The Audit Report magazine Lending Library Conferences, seminars ACUIA Conference 6/14/2011
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Tools and Resources QUESTIONS ? ACUIA Conference 6/14/2011
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