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The Path to Quality. . . a step-by-step guide to

world-class internal auditing

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What is quality?

• Exceeding stakeholder expectations.

• Ensuring value is added to all areas of the IAA and the IAA adds value to the Organization.

• Competency and Proficiency to the Organization’s risk management, controls and governance processes.

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Achieving QualityCan Be Impacted By:• Organization’s

– Acceptance ― Goals/Objectives

– Mission ― Tenaciousness

– Temperament / Appetite

• Chief Audit Executive’s professionalism, commitment and diligence

• The Quality Assurance and Improvement Program (QAIP)

• Audit Staff’s Commitment

• Audit Customers Understanding

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Maturity ModelLevels to Quality

Level 1: Introductory

Level 2: Emerging

Level 3: Established

Level 4: Progressive

Level 5: Advanced

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Level 1 Introductory Maturity

• Fairly new shop or new CAE adopting the IIA Standards

• Organization lacks understanding of importance

• Senior Management/Board don’t understanding value

• IAA has not established a QAIP

• Not complying with requirements

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Level 1 Key Messages

• Have not adopted quality in IAA

• Might be a new internal audit shops or new CAE

• Need to assess and to document

• Understand the Standards

• Critical to begin a QAIP

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Steps to Introductory Quality

1. Adopt the definition

2. Achieve appropriate reporting structure

3. Commit to quality through the audit Charter

4. Acquire management’s buy-in

5. Educate the audit committee

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Level 2 Emerging Maturity

• The QAIP must include periodic and ongoing self-assessments

• Compliance monitoring with the Standards is in place

• Annual presentation of self assessment results is complete to senior management and Audit Committee

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Level 2 Key Messages

• Ongoing monitoring of Standards/Ethics

• Self Assessment determines strength & weaknesses

• IAA has found what’s working, what’s not working

• Report results of self assessments

• Maintain documentation and detailed plans for improvement

• IAA completes presentation of results annually

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Steps to Emerging Quality

1. IAA gets involved with The IIA and local chapter

2. CAE works toward certification

3. CAE attends QA Self Assessment training and/or seminar

4. Assign monitoring responsibilities

5. Use the Self-Assessment Checklist

6. Obtain feedback from others

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Level 3 Established Maturity

• Annually obtain internal independent validation of IAA ongoing self-assessment

• CAE, Senior Management & Audit Committee support and involved in Quality Assessment process

• Committed to obtaining an external independent validation every five years.

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Level 3 Key Messages

• CAE is committed to Professionalism and Quality of IAA

• Audit committee directly involved

• Rigorous IAA self assessment reviewed and tested

• Peer review performed with qualified participants

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Steps to Established Quality

1. IAA staff certifications demonstrate IAA professionalism and competency

2. IAA uses Balanced Scorecard

3. Requires proper qualifications for validator

4. Develops plan for improvements and establishes timeline for implementation

5. Report QA validation to The IIA Quality (quality@theiia.org)

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• List here.

Balanced Scorecard for Internal Auditing

Board/Audit Committee

OBJECTIVES MEASURES

• List here.

• List here.

Management/Audit Customers

OBJECTIVES MEASURES

• List here.

• List here

Innovation/Capabilities

OBJECTIVES MEASURES

• List here.

• List here.

Internal Audit Processes

OBJECTIVES MEASURES

• List here.

INTERNAL AUDITSTRATEGY

CORPORATESTRATEGY

• Experience

• Education

• Training

• Certification

• Reporting Relationships

• Expectations

• Perspective on IA Roles

• Satisfaction Surveys

• Requests

• Complaints

• Importance Levels

• Improvements

• Findings

• Repeat Findings

• Savings

• Quality Assessment

• Perspective on IA Roles

• Satisfaction Surveys

• Risk Concerns

• CAE/AC Private Meetings

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Level 4 Progressive Maturity

• QAIP is now a well developed, defined and documented program

• IAA is well recognized within the organization as value added

• IAA has an External QA conducted every five years

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Level 4 Key Messages

• IIA has an established mindset for professionalism and demonstrates it in their activities

• Audit committee, management and staff all support commitment to Quality

• Stakeholder confidence is high because of quality and successful & leading practices

• IAA is in compliance with Standards & Ethics

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Steps to Progressive Quality

1. CAE has CIA certification

2. Any gaps have been addressed and action plans are in place

3. Follow best & leading practices

4. A qualified external QA provider is used

5. Report completion of external QA to The IIA (quality@theiia.org)

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Level 5 Advanced Maturity

• IAA has a active and fully integrated Quality Assurance & Improvement Program

• External QAR are performed every three years

• All IAA staff have certification and rigorous continuing education

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Level 5 Key Messages

• IAA raises the bar for professionalism

• Respect by Organization and board

• Chief Audit Executive is a respected member of executive management

• IAA shows an unrelenting commitment to growth, development, and improvement

• Exemplary audit committee

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Steps to Advanced Maturity

1. IAA maintains an appropriate mix of professional designations

2. IAA is a benchmark for progress to others in and out of their industry

3. IAA share tools and success story

4. Serve on QA review teams

5. Mentor, speak, research, and write for the profession of Internal Auditing

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The Path to Quality

• Add value

• Be perceived as adding value

• Ensure the value you add in the future

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This Path to Qualitypresentation was

developed by The Institute of

Internal Auditors (IIA)Global Headquarters.