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Part of the continuing series of internal audit best practices, this session will provide insight on the realities of internal audit management roles, and the elements needed to build a strong internal audit department to provide the most value for your company.

The Institute of Internal Auditors (IIA) has done a tremendous job raising the profile of the auditing profession. As auditors, we strive to abide by the standards and guidelines. But have you ever asked management within your company if they knew such standards existed? Do they truly understand the concepts of risk-based auditing, independence, and obligations to the board or charter requirements? It is surprising how so many of these basic concepts are taken for granted by auditors and that we assume management is aware.

Individuals considering an internal audit management role should understand the challenges as well as benefits that may be presented to them within this role. It is critical that certain elements of the job be well understood by those holding the positions. This session is designed to step into the reality of the internal audit management role, and discuss some of the concepts that aren’t always openly discussed within organizations--but are important concepts the internal audit manager should ensure they can clarify with management and be prepared to address on the job.

Intro Video Transcript

Foundation for a Strong Internal Audit Department By Lynn Fountain Welcome, everyone, to today’s session on Foundations for a Strong Internal Audit Department! This is a continuing series on Internal Audit Best Practises and designed specifically for Internal Audit Supervisors, Managers, Directors or even Chief Audit Executives. In our first segment that we held for Top Skills for Internal Audit Management, we talked a lot about suss skills and technical skills and how to apply those, and some of the difficulties that we experience as Chief Audit Executives or Audit Managers, within our profession. Today we’re going to go a little bit deeper than that, we’re going to talk specifically surrounding things that should be in place to really build that strong foundation for an Internal Audit Department, so that you get the most value for your company. My name is Lynn Fountain; I will be your presenter. I’m a Subject Matter Expert I’m a Past Chief Audit Executive for two separate international companies I’m a recognised Author, Trainer and Speaker and I’m currently publishing a broad educational book for the Institute of Internal Auditors Research Foundation, that book should be out in the spring of 2015, so I’d advise you to look at that. You can look at my profile through my LinkedIn and my email is: fountainlynn1@gmail.com If you have any questions post this presentation, I always very much welcome interaction, brainstorming, talking to other people, and I find as a past Chief Audit Executive, someone who has spent twenty plus years both internal and external audit combined, that I often get my best ideas from talking with other people in the profession, understanding what challenges they have, the successes they’ve had and how they’ve gone about those. So, I always enjoy talking to other people and I hope you reach out to other individuals through varies forms including LinkedIn, which has a great forum out there for Internal Audit Executives, CAE’s and then just Internal Audit Profession in itself. So, with that let’s start a little bit about our Introduction, about the Elements that we’re going to go through today. You know, if you’re considering entering an Internal Audit Manage role, you really need to understand both the challenges as well as the benefits of that role. I always tell people that, I think that Internal Audit is one of the most difficult roles you can hold in an organization and depended on whether the organization is publicly traded, privately held, none profit. You know, internal audit groups have a vast array of responsibilities and expectations. So, it’s critical that internal audit managements really have a good understanding of what the job entails and what they need to do to meet both IIA standards, Institute of Internal Audit standards. As well as, provide the best value for their organizations. So, you probably heard the phrase “If you can’t stand the heat, stay out of the kitchen.” So I often heard that from my mother. At one point of time I was talking to another CAE at a particular point in time when I was really struggling with a few things with the company that I was with at the time and I was like saying “Man, we need a kind of chief audit executive support group, if nothing else.” And sometimes you can get to feeling that way, so when you do, I encourage you to reach out to other people that are in your position. You can often talk about the challenges that you each have and maybe ways to brainstorm and solve those challenges. So, the most successful CAE’s really have to have that vote or two and that willingness to be there and understanding that there are going to be times when they’re going to have to go up against management and you know “Stand that heat” So, we’re going to talk about some of those things today and maybe some of the things that could help you in your quest for making sure you get the best value for your company overall. So, as I mentioned earlier this session is really designed to kind of step further into the reality of Internal Audit Management. You know, theory is great, our internal audit standards are very good but in reality what you’ll find out there is a lot of your managers and management process sonar’s within your area, and even your audit committees really don’t have a good enough understanding of things like the IIA standards and what your charter really means, and why it should be upheld. So, those are the things we’re going to talk about today. They’re important; very important concepts, really clarify with your management. I was with a particular company for eleven years and was the chief audit executive probably the last six years of that, and I was surprised at one point of time when I actually went to my CEO after we had, had a quality reassurance review and sat down with him and went through the standards. I always thought that was something that had previous been done, but in reality he didn’t know about them and our management know that lawyers have standards and doctors have standards but sometimes they don’t think of the fact that auditors also have standards. So, that’s one of the things we’ll continue to go through and speak about a little bit. So, I always say that the internal audit profession itself, I believe has done a tremendous job of raising the profile of the internal auditor. You know, as auditors we really strive to abide by this standards. We want to abide by those guidelines, hold our independence, and hold our objectivity and scepticism. But, step back. Have you ever really asked management in your company or even your audit committee; do they understand that standards exist? And they may say yes. But do they understand all the elements of the standards and if you get an “Uh, I’m not sure” answer, that’s one of those areas that can be very beneficial in helping you reach your overall goals. So make sure your management understands the concepts of things, like risk based auditing, independence, your obligations to the board and your charter requirements. Those are some of the things we’re going to talk about today, but those can be very, very helpful in really achieving your long term goal. This series as I said, will have a series of varies seminars kind of covering internal audit management and internal audit best practises and it’s really a design towards the experience, towards the new internal audit management. I want to provide you really a real world, you! Into the challenges and responsibilities of what you may find yourself facing. I want to examine critical skills that management really has to develop and recognise the internal audit is a profession and it is guided by standards. So, as I said in the beginning, if you can’t stand the heat, it’s good to stay out of the kitchen. So with that in mind, let’s talk a little bit about what is on today’s agenda. Okay, going to today’s Agenda: • Critical components of upholding your internal audit charter • The difficulties of the concept of Independence • Understanding what management views as Risk Based Auditing • Can internal audit develop the annual audit plan independently? • When management says “no” to internal audit We’re going to talk about first critical components of really upholding your internal audit charter. I taught a class here at one of our universities in the mid west where I live, and one of the things that I started with really were the basics of internal audit charter and as we go through these you’ll see why because it really is kind of your toolkit to start with, to really set and establish the foundation of what your department will do. So we’ll talk about that a little bit, as well as the difficulties of the concept of independence for internal audit. Our standards have a lot of information about that but you know in reality internal audit works for the company. So, inherently the independence issue is very, very difficult. So we’ll talk about that. I also want to go through a little bit about understanding what management may review as quote risk based auditing versus what auditors promulgate and view as risk based auditing and there can be a difference there, and then talk a little bit about the audit plan. How has that plan developed? And can you as an internal audit really independently develop that plan? And then we’ll talk at the end a bit about what will you do when management says no? You’ve all probably run up against that circumstance where maybe it’s been a specific issue within an audit, maybe it’s even been a project that you’ve been asked to be involved with. Management says no an internal audit doesn’t need to be in that area. What is it that you should do? What are your obligations and how far do you take the issue? So, we’ll give you some ideas there.

Learning Objectives

  • Explore critical components of upholding your internal audit charter.
  • Evaluate the definition and requirements of risk based auditing.
  • Determine the meaning of developing an independent audit plan.
  • Understand how to deal with management when they respond negatively to an issue.

Included In Certifications

This course is included in the following Expert Certifications:

17 CoursesInternal Controls and Internal Audit Certification

  1. Internal Controls: What Every Financial and Accounting Professional Needs to Know
  2. COSO 2013 Framework Requirements and Implementation Overview
  3. Applying the Standards for Internal Auditors in Line with Your Organization's Needs - Part One
  4. Applying the Standards for Internal Auditors in Line with Your Organization's Needs - Part Two: Managing Internal Audit and Nature of Work
  5. Applying the Standards for Internal Auditors in Line with Your Organization's Needs – Part Three: Executing the Audit Engagement
  6. Identifying and Implementing the Proper Balance of Internal Controls
  7. Proper Documentation Methods for Internal Audit and Internal Controls Processes
  8. Information Technology (IT) Risks in Emerging Business Environments
  9. Foundations for a Strong Internal Audit Department
  10. Keys to Managing an Effective Internal Audit Function
  11. Internal Audit: Keys to Building Effective Relationships with the Audit Committee
  12. Understanding Risk-Based Auditing
  13. Risk Based Auditing – Establishing a Methodology
  14. Risk Based Auditing – Applying the Methodology
  15. Segregation of Duties for Core Business Processes
  16. Keys To Maintaining Objectivity and Professional Skepticism
  17. When The Whistle Blows Part 2: Managing Whistleblower Hotlines

88 Reviews (363 ratings)Reviews

5
Member's Profile
A lot of topics were covered that crossed each other in scope, as in real life! Clarity came after multiple review of the topics. Definitely spoke to the challenging task of internal auditing and modifying the audit charter to accommodate a changing environment and company functioning. Gained greater respect for the complexity of creating a company that keeps it "top game".
5
Member's Profile
The instructor asks critical questions that every CAE ought to be able to answer and takes the participant through the thought process in a way that models how a CAE would use his/her mind. I would consider this mandatory material for every new CAE - I am in my second year as a CAE and wish I took this course before I signed up!
4
Member's Profile
Likes – It is a very well-organized course which works well for self-study. It provides a very comprehensive review of Internal Audit. The organizational view is realistic and very helpful. Opportunities for improvement – Develop better examples and have more “case study” content.
5
Member's Profile
Lynn hit another one "out of the park" with this course. These are the real meaty issues that IA managers, directors and CAEs have to face, and this course provides a lot of discussion, consideration and helpful thoughts on how to face the real problem areas that all auditors face.
5
Member's Profile
The course is helpful and interesting, but the slides could have been organized and laid out differently to provide a concise and useful review material rather than posing open-ended questions.
4
Member's Profile
This course provides a comprehensive discussion of the various critical elements of the internal audit function within the business organization. The material is well-presented and engaging.
5
Member's Profile
Really helpful, it was so reassuring to know that management pushes on other IA and accountants. I now know that I'm not alone! The instructor had some great insight and advice.
5
Anonymous Author
Excellent information on best practices and the challenges an internal audit manager, CAE or audit staff could (or will) encounter, when being part of an internal audit team.
5
Member's Profile
This course was helpful for in understanding the value of foundations for a strong internal audit department and the significance of management understanding.
4
Anonymous Author
This a very comprehensive presentation. The topics covered are very interesting and the speaker is very good on relating the topics to real life issues.
5
Member's Profile
I liked the course because I completed it and the exam at my own pace. IA managers and IA executives would benefit the most from this course.
5
Member's Profile
Outstanding course. I thank Proformative and Ms. Fountain for making this course available. A must for all IAs regardless of level.
5
Member's Profile
Always was excating to learn a lot of things from Ms Fomtain course, It was useful and parctical to be involved in to tnhe course.
5
Member's Profile
Having the video in the upper corner of the screen - while a small thing - helps the overall flow - not just a voice and a slide.
4
Anonymous Author
Great course to listen in and pretty much gives an idea on how to maintain a sustainable and strong internal audit department.
5
Member's Profile
It was a well though out. Well verse class. I am very familiar with the course material but it was still presented reasonably.
5
Member's Profile
Well organized course. I'm surprised at how much I still need to know about IA. Anyone teaching auditing would benefit.
5
Member's Profile
Very helpful overview of the internal audit function and their its duties, reporting responsibilities and governing body.
5
Member's Profile
Course was very comprehensive. I think some more specific examples would be helpful to illustrate some of the concepts.
4
Member's Profile
Nicely done. Very effective presentation on the foundations of IA. I would recommend easily to anyone interested.
4
Member's Profile
This instructor always gives a very detailed explanation of the course she is teaching. I learn a lot from her.
4
Anonymous Author
COurse provides a good foundation for those understanding the objectivity required to perform IA effectively
5
Member's Profile
I would like to tell, that I was so excited of the course quality, that I would like take this course again.
5
Member's Profile
Helps out a great deal in my current role, while not very high level -- it provides a great starting point.
5
Member's Profile
Great course because it relates the theory of IA activity to reality and the challenges of this activity.
5
Member's Profile
Well organized and crafted course and its contents; beneficial to most internal auditors. kudos to Lynn.
4
Member's Profile
This was a good refresher on the importance of an Internal Audit charter and the required components.
4
Anonymous Author
Great course on the internal audit function. I found the information to be very helpful and useful.
5
Anonymous Author
Made me reflect back to the cpa exam review material. Did a thorough job of presenting the material.
4
Anonymous Author
Lots of high-level points. Course would be more interesting if more specific examples are added
5
Anonymous Author
The facilitator was extremely well-spoken and explained each concept with depth and clarity.
4
Anonymous Author
Good high level explanation of the Internal Audit department in the organization foundation.
4
Member's Profile
Another clear concise and to the point presentation. Well laid out and engaging slides.
4
Anonymous Author
Decent overview. Probably most appropriate for Staff and Senior level auditors.
5
Anonymous Author
Very clear synopsis; this is good material for exec management to hear as well.
4
Member's Profile
Excellent overview of what should be expected for and from an IA department.
5
Anonymous Author
A useful reminder of standards and reconciliation of standards vs real life.
3
Anonymous Author
Very pointed and informative presentation on the topic, very well prepared.
4
Member's Profile
Great refresher for the foundations of a strong internal audit function.
5
Anonymous Author
Good information for someone entering into the Internal Audit function.
3
Member's Profile
Nice description about the role of internal auditor in the organization
5
Member's Profile
Great review of the principles of internal auditing. Great instructor
4
Member's Profile
Management may get a better understanding of the position of the CAE.
5
Anonymous Author
Good to hear the internal audit perspective, as an external auditor.
5
Member's Profile
Internal auditors play an important and vital role within a company!
4
Anonymous Author
Good insite overall on IA function but lacks the practical example
5
Member's Profile
Excellent content. Content was very relevant and easy to follow.
5
Anonymous Author
Helpful background on requirements around Internal Audit teams.
4
Member's Profile
This is a cursory review of the functions of internal auditing
4
Anonymous Author
I liked The part relating to RBA and "when Management says no"
5
Anonymous Author
An interesting and challenging short course. Thank you!
5
Member's Profile
Very good presentation with some thought-provoking insights
5
Anonymous Author
Thanks for the course. Well presented and well explained.
5
Anonymous Author
Good speaker. Obviously very knowledgeable on the topic.
4
Member's Profile
Materials were good and supported the areas adequately.
5
Anonymous Author
Thorough and clear presentation of the concepts!
4
Member's Profile
All information was relevant with good examples.
5
Anonymous Author
Great overview with really organized slides
5
Member's Profile
Great course! Very informative and helpful.
4
Member's Profile
This was a really relevant course. Thanks.
5
Member's Profile
A must review for Internal audit staff.
5
Member's Profile
Staff and senior internal auditors.
5
Anonymous Author
Good internal audit knowledge builder
4
Member's Profile
Nice overview of a very boring topic.
5
Anonymous Author
Good considerations and information
4
Anonymous Author
Great overview of internal audit.
5
Member's Profile
very well summarized audit plan.
4
Anonymous Author
Very clear and concise class.
Member's Profile
Good overview and perspective
5
Anonymous Author
Nice presentation of content.
5
Member's Profile
Good Review and presentation.
4
Anonymous Author
Good refresher course for IA!
4
Anonymous Author
Good overview of IA function.
5
Member's Profile
Great intro to IA department
5
Member's Profile
Complete and practical guide
4
Anonymous Author
It was a very good course
4
Anonymous Author
Good content - a bit lomg
4
Anonymous Author
nice refresher course
Member's Profile
Very good overview
Anonymous Author
Good information!
4
Member's Profile
Easy and quick
4
Anonymous Author
Good course
5
Member's Profile
N0 comments
4
Anonymous Author
Good Course
5
Anonymous Author
Excellent
4
Anonymous Author
Good info
5
Member's Profile
great!
4
Member's Profile
Good

Prerequisites

Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
Foundations for a Strong Internal Audit Department
  8:10Internal Audit Definition Challenges
  16:24Independence Challenges
  7:12Charter Challenges
  10:24Authority Challenges
  9:57Actions
  8:26Reporting Challenges
  4:33Intro to Risk Based Auditing
  3:17RBA: Steps and Understanding
  7:49Identifying, Responding and Concluding on Risk
  8:59Independence of Audit plan
  10:35When Management says NO
CONCLUSION
  3:22Course Summary
CONTINUOUS PLAY
  1:49:13Foundations for a Strong Internal Audit Department
SUPPORTING MATERIALS
  PDFSlides: Foundations for a Strong Internal Audit Department
  PDFFoundations for a Strong IA Dept. Glossary/Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM