1. Internal Auditing in Government: A Global Perspective David A. Richards, CIA Richard F. Chambers CIA, CGAP, CCSA The Institute of Internal Auditors

2. Agenda Current trends in corporate internal audit The unique nature of audit in government Ensuring accountability Improving integrity Fighting corruption Challenges facing government auditors

3. Emerging Trends in Corporate Internal Audit Visibility of and emphasis on internal audit reaching new heights Fostering compliance with new regulations and statutes Renewed focus on: Risk Control Governance Increased emphasis on objectivity and independence

4. New Challenges Facing Internal Auditors Maintaining a fully staffed internal audit activity with appropriate skill sets Reporting relationships with senior management and the board Increased demand for control and financial focused engagements Fostering compliance with statutory and regulatory requirements Maintaining a risk-focused audit plan in an era of competing priorities Providing consulting services and maintaining objectivity in fact and appearance

5. The Unique Nature of Government Auditing Alignment – reporting relationships often defined by statute Charters – more clearly defined roles and responsibilities Access to information – typically unrestricted Operating environment – often political Visibility of final reports – often made public Key responsibilities: assuring accountability; improving integrity; fighting corruption

6. Government Auditors: Assuring Accountability Government operations are funded by and provided for the benefit of the citizens Citizens have the right to expect their governments to run: Efficiently Effectively Free of waste, fraud, and mismanagement Ensuring accountability is a vital responsibility of government auditors

7. Government Auditors: Improving Integrity The vast majority of government officials carry out their responsibilities with the utmost integrity Some government officials fall short Audit can mitigate the risk of integrity failures by: Proactively assessing and addressing high-risk areas Promptly reporting instances of fraud to appropriate authorities for investigation Developing and delivering appropriate training and awareness briefings within their agencies

8. Government Auditors: Fighting Corruption Corruption can exist within government or on the part of contractors and others who conduct business with government A strong and effective audit function is a critical tool in fighting corruption Success factors include an audit function that is: Adequately resourced Independent Trained in fraud prevention and detection Networked or integrated with appropriate investigative and law enforcement agencies

9. Top Ten Challenges Facing All Government Audit Organizations 1. Adequate audit staffing82% 2. Adequate compensation81% 3. Ability to measure performance73% 4. Adequate technology resources71% 5. Ability to report results promptly70% 6. Ability to benchmark68% 7. Promoting effective governance67% 8. Ability to plan based on risk65% 9. Ability to contract for experts62% 10. Adequate resources for CPEs61% Source: Global Audit Information Network Flash Survey

10. Questions? David A. Richards and Richard F. Chambers The Institute of Internal Auditors