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Insight – Delivering Value to Stakeholders

Insight – Delivering Value to Stakeholders. San Francisco Chapter of the IIA Tuesday, September 11, 2012 Patricia K. Miller Former IIA Chairman of the Board Owner, PKMiller Risk Consulting, LLC pkmiller100@gmail.com.

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Insight – Delivering Value to Stakeholders

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  1. Insight – Delivering Value to Stakeholders San Francisco Chapter of the IIA Tuesday, September 11, 2012 Patricia K. Miller Former IIA Chairman of the Board Owner, PKMiller Risk Consulting, LLC pkmiller100@gmail.com

  2. Value Proposition Task Force launched in April 2008, under the leadership of Denny Beran • Task Force objective to explore what internal auditors should deliver to their customers – based on growing expectations in an ever more challenging environment • In March 2010, the task force delivered its results, and developed a new Value Proposition for internal auditing, depicted below Background 2

  3. Extensive reference material available supporting Assurance and Objectivity categories; very little related to Insight • IIA Research Foundation (IIARF) decided to develop project to measure both stakeholder and chief audit executive (CAE) views of insight delivery and provide guidance to CAEs to further deliver insight • IIARF objectives: • measure clarity and acceptance of definition of insight • identify approaches and techniques to increase delivery of insight • practical ideas for CAEs interested in living up to the Value Proposition • Research conducted primarily in Australia, Malaysia, The Netherlands, North America, and South Africa Research project 3

  4. Research Overview

  5. SurveyofCAEs and stakeholders yielded 358 responses • Selected follow-up interviews with 13 participants (7 CAEs and 6 Board members and executives) Participation PKMiller Risk Consulting LLC 5

  6. Research results SA/A – Strongly Agree/Agree A/F – Always/Frequently Survey also provided potential examples of insight delivery to illustrate the concept, and asked CAEs and the stakeholders to evaluate if internal audit should deliver, and if internal audit actually did deliver, with what frequency…

  7. Illustration of insight concepts 7

  8. Survey results 8

  9. Survey results 9

  10. Survey results 10

  11. Survey results 11

  12. Lessons for CAEs

  13. Board expectations based on assurance • Executive expectations based on new information, new approaches, or novel enhancements • IA team with finance and accounting backgrounds vs. operational or general management experience • IA lack of business acumen, courage, and/or leadership • IA departments who view role as control tester vs. catalyst for positive change Why the gap? 13

  14. Closing the gap Top 5 Enabling Factors 14

  15. Closing the gap Top 5 Facilitating Approaches 15

  16. Key factors by respondent Business Management Experience 16

  17. Key approaches by respondent Tracking Value Tracking Value 17

  18. Certification as part of the answer! 76% Strongly Agree/Agree Q: The Internal Audit function in my organization actually delivers insight 88% Strongly Agree/Agree 18

  19. Assessing internal audit performance Jenitha John, FirstRand Limited, South Africa • Leveraging IT expertise and data analytics Jim Molzahn, jcpenney, US • Communicate IA mission and focus clearlyJohn Lewis, Safeway, US • IA activities aligned with stakeholder strategies Chris Bennecke, Invocare, Australia • Stakeholder engagementJenitha John, FirstRand Limited, South Africa Helpful suggestions from other CAEs 19

  20. Meet with your key stakeholders — now and routinely going forward • Consider reporting relationships and sufficient organizational independence • Align internal audit mission and focus with agreed expectations • Refocus internal audit approach to agree with mission • Critically assess leadership skills and communication style Concluding thoughts for CAEs 20

  21. Free download to all internal auditors (member or non-member!) Research project now available 21

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