Common Body of Knowledge 2006

Report
The Global IIA
A Vision for the Profession
Gerry Cox, MIIA, CIA
Chairman of the Board
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The Key Initiatives & Challenges
• International Professional Practices
Framework
• Common Body of Knowledge
• IIA Strategic Plan
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Vision for the Future-
The New IPPF
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Why Did We Update the PPF?
• Professional Practices Framework (PPF) concept is still
viable, but new elements of guidance are being issued that
did not exist at time of the current framework, e.g.,
– Position Papers
– Global Technology Audit Guides
• Guidance development and approval processes not
transparent nor consistent.
• Inclusion of affiliate guidance within PPF not defined.
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What Were We Trying To Achieve?
• To assess the effectiveness of The IIA’s professional guidance
structure and recommend improvements.
• To establish formal processes for the development, review,
approval, and issuance of the various types of guidance. To
communicate such processes to members and stakeholders.
• To define education, oversight and monitoring processes to
facilitate ongoing development of guidance, consistent with the
PPF.
So that:
The PPF structure and associated processes ensure
that authoritative guidance is current, relevant, timely
and internally consistent.
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IPPF Exposure Statistics
• Exposed January 26, 2007 for 90-day period, ending on April
20, 2007.
• Almost 17,000 downloads.
• 421 responses, inclusive of individuals and affiliates or
organizations.
• Responses from 48 countries.
• Received feedback from major affiliates, key stakeholders
(IFAC, GAO, ACCA, ALGA), and numerous members.
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IPPF Exposure Feedback
•
Feedback very positive, with a supportive response rate
greater than 85% for all but four proposed changes:
–
–
–
–
•
The inclusion of the Quality Assurance & Improvement
Guidance as a new separate element of the Framework
Redefining implementation standards to only encompass
assurance and consulting standards
Having varied voting requirements to approve new guidance,
determined by the approval body
The recommended review cycles for maintaining the guidance
elements
Recommended response described on next page.
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IPPF Exposure Response
Task Force Response
Rationale
Eliminate QA guidance as separate
element.
Guidance maps within Practice Guide
element of Framework.
Retain original proposal to limit
Implementation Standards to assurance
and consulting.
Responses reinforced preference for
‘principles-based’, not engagement
specific standards, which can be
addressed in guidance.
Defined consistent voting requirements
for guidance approval -- 2/3 of the
members of the relevant Committee or
Board.
Given importance of global
representation and support for new
guidance, simple majority not sufficient.
Retained and clarified three year
minimum review cycle which could be
simply to confirm (but not change)
guidance.
Existing language contained ambiguity
which was clarified.
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New IPPF
Definition
Statement of fundamental purpose, nature, and scope of internal auditing.
Code of Ethics
Statement of principles and expectations governing behavior of individuals and organizations in the conduct of internal
auditing. Description of minimum requirements for conduct. Describes behavioral expectations rather than specific
activities.
International
Standards
Mandatory requirements consisting of:
• Statements of basic requirements for professional practice of internal auditing and for evaluating effectiveness of
its performance, which are internationally applicable at organizational and individual levels. Principle focused and
provide framework for performing and promoting internal auditing. Includes Attribute, Performance and
Implementation Standards.
• Interpretations which clarify terms or concepts within the Statements.
Consider both Statements and Interpretations to understand and apply correctly.
Position Papers
IIA statement to assist a wide range of interested parties, including those not in internal auditing profession, in
understanding significant governance, risk or control issues and delineating related roles and responsibilities of internal
audit.
Practice
Advisories
Address approach, methodology and considerations, but not detailed processes and procedures.
Concise and timely guidance to assist internal auditors in applying Code of Ethics and Standards and promoting good
practices. Includes practices relating to: international, country, or industry specific issues; specific types of
engagements; and legal or regulatory issues.
Practice Guides
Detailed guidance for conducting internal audit activities. Includes detailed processes and procedures, such as tools and
techniques, programs, and step-by-step approaches, including examples of deliverables.
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When Will the New IPPF be Completed?
• Fully revised IPPF completed January 2009, and available in
core languages of English, Spanish and French.
• July 2007 – January 2009
– revise Standards (add Interpretations) and re-expose
– modify Practice Advisories to meet new description
– review IPPF referencing system to include Position Papers and
Practice Guides
• Professional Practices Council will monitor implementation
plan and timeline.
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Next Steps
• Obtain Board approval of IPPF.
• Complete the Implementation Plan.
– Develop communications strategy
– Assign project manager
– Finalize project plan
• Define and Implement Education and Maintenance
Processes.
– Committee members
– External stakeholders
– Members and affiliates
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Common Body of Knowledge 2006
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CBOK and The Internal Auditing
Profession
• CBOK will help us:
– More clearly understand how internal
auditing is being practiced around the world
– Help us update our professional Standards
– Allow us to look closely at the framework of
the profession
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Previous Studies
Study Name
Year
Participation
Responses
Languages
Common Body of
Professional
Knowledge
1972
United States
75
1
Common Body of
Knowledge
1985
United States and
Canada
340
1
Common Body of
Knowledge
1992
United States and
Canada
1247
1
Competency
Framework for
Internal Auditing
1996
21 Affiliates
136
1
Common Body of
Knowledge
2006
89 Affiliates
145 Chapters
9,366
17
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Summary Demographics
Participants
CAE or equivalent
26.5%
Audit Managers
22.8%
Audit Seniors/Supervisors
25.2%
Audit Staff
18.2%
Others
7.3%
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The Standards
Comparison of Adequacy of Guidance Provided by The Standards and
Compliance with The Standards for All Respondents (Percentages)
Perception of Adequacy of
The Standards
Full Compliance
1000- Purpose + Auth
86.2
63.0
1100- Ind + Obj
88.1
66.9
1200- Due care
87.0
62.9
1300- QAIP
77.3
40.0
2000- Manage IAA
83.7
57.6
2100- Nature of work
82.2
57.5
2200- Engagement Plan
83.6
57.7
2300-Engagement
83.8
59.7
2400- Comm Results
85.2
64.1
2500- Monitoring
81.8
52.6
2600- Resolution Risks
76.0
46.9
Standard
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The Standards
Common Reasons for Not Adhering to The
Standards
•Inadequate Internal Audit Activity (IAA) staff
•Management does not believe it adds value
•Compliance is too time consuming
•Compliance not supported by management
•Superseded by local/government regulations or standards
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Emerging Roles of the IAA
The External Environment Differs Globally
•61% of IAAs are in countries with laws mandating an
IAA and 13% anticipate such laws within the next 3 years
•68% of IAAs’ organizations have corporate governance
codes and 23% anticipate them in 3 years
•71% of IAAs organizations have internal control
frameworks and 24% anticipate them in the next 3 years
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Action Items for Profession
• Increased compliance with The Standards
• Expansion of university level courses in internal auditing
• Education of post university level employees about
internal auditing
• Increased certification of staff
• Increased professional development of staff
• Proactive discussions about the value of internal
auditing as a profession and an activity
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CBOK – Project Deliverables
• A Global Summary of the
Common Body of Knowledge
2006
– The Preview Edition is for sale
now
– Anyone who buys the Preview
Edition will also receive the
complete book when it is
released in October 2007
– We anticipate that translation
of the complete book into
Spanish and French will
commence in September 2007
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IIA Strategic Plan
Planning Ahead for the IIA
and the Profession
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Where Are We Today?
• In third year of current 3 year plan
• Some objectives will be carried over
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2005-07 Strategic Objectives
• Advocacy
– To be recognized as the global voice for the internal
audit profession.
• Globalization
– To develop and sustain the internal audit profession
globally through appropriate infrastructure,
coordination, support and communication.
• Service
– To provide exceptional service to IIA members.
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Emerging Themes for New Strategy
• Elevate and advocate the profession
• Operate as a global organization
• External recognition as the voice of the
profession who sets the standards
• Preferred and primary provider of
research for and services to the
profession
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Preferred Future Milestones
By 2013:
1.
Internal Auditing is universally recognized as a
profession
To Accomplish this The IIA:
2. Defines the principles of the profession and assures
that the principles are available seamlessly worldwide
3. Assures adherence to professional requirements
4. Is the preferred provider in the research,
development and dissemination of knowledge to
advance the profession
5. Is seen by its members and operates as one global
organization
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Strategy
The Main Recommendations
1.
2.
Develop enhancement to the professional designation that
builds upon CIA
–
Develop CIA, with additional specific knowledge, experience and
educational requirements
–
Develop competency and maturity models, and align training
strategy and core curriculum to models
Develop membership strategy aligned with new professional
designation
–
Introduce new ‘full’ vs. ‘associate’ member categories, and phase
in membership requirements over extended time period with
selected grandfathering of existing members
–
Develop membership retention and membership recruitment
strategies, including underrepresented specialist groups
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Strategy
The Main Recommendations
3. Develop multi-faceted assessment processes and phase in
over extended time period
–
Self-assessment tools against competency and maturity models
–
Self assessment tools for professional designation
–
Self-reporting mechanisms for members on base membership
requirements, and for CIAs on expanded requirements
–
Selected independent validation processes for those with
professional designation
4. Develop structured global research methodology and
guidelines
5. Develop recommended training curriculums, and leverage
other training providers, as appropriate
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Strategy
The Main Recommendations
6.
Leverage global Knowledge Management (KM) study to
implement KM system and process, including ‘virtual portal’
to provide information, products and services in local
markets
7.
Develop global ‘footprint’ by strategically determining most
important expansion areas for the IIA and the profession
–
Develop service models for serving affiliates at differing maturity
levels, leveraging IIA headquarters and mature affiliates as well
as regional offices
8.
Upon completion of NAB study on feasibility of NA Affiliate,
reassess global governance structure and funding model
9.
Expand advocacy strategy to encompass member and
nonmember practicing internal auditors
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Milestones, Outcomes & Strategies
1. Internal Auditing is universally
recognized as a profession
High preponderance of practitioners are certified and meet professional
requirements
Value of internal auditing recognized by stakeholders
• Clearly define value proposition; evaluate implications of internal audit ‘opinion’ on
internal controls
• Develop requirements for the CIA that exceed current level
• Develop phased membership transition strategy for ‘associate’ vs. ‘full’ members,
and develop membership growth and retention strategy
• Continue advocacy efforts and include practicing internal auditors
• Continue IAEP educational strategy
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Milestones, Outcomes & Strategies
2. Defines the principles of the profession
and assures that the principles are available
seamlessly worldwide
Global current PPF
Global communications mechanism to consistently, effectively and
efficiently deliver PPF to all members and practitioners
• Implement IPPF with routine evaluation of standards and guidance vs.
professional needs; develop individual vs. company level standards
• Execute the Translation Strategy including a routine re-evaluation of core
languages; develop a cooperative translation process for non-core
• Develop proactive communication strategy to educate members, nonmembers and
stakeholders on principles of profession
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Milestones, Outcomes & Strategies
3. Assures adherence to professional
requirements
Professional requirements for individuals and, separately, for organizations
An independent monitoring and validation process to assess adherence by
those internal auditors with the professional designation
• Communicate requirements for new professional designation and develop
supporting educational programs
• Develop self-assessment frameworks for members with and without professional
designations
• Develop disciplinary policy for noncompliance
• Develop selected independent validation process for those with professional
designation
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Milestones, Outcomes & Strategies
4. Is the preferred provider in research,
development and dissemination of
knowledge to advance the profession
Effective global knowledge management of IA theory, guidance, best
practices, tools and techniques; through global organization, provides realtime information on emerging issues and their implications
• Develop structured global research methodology, guidance and prioritization
process
• Leverage Knowledge Management study to develop KM system and process,
including ‘virtual portal’ for sharing information, products and services
• Develop competency and maturity models, with customizable training plans
• Develop global framework and standards for training/services; develop
recommended curriculums and leverage other training providers, as appropriate
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Milestones, Outcomes & Strategies
5. Is seen by its members and operates as
one global organization
A global structure/economic model in place to sustain the IIA globally
Respective roles, responsibilities, accountabilities of each element are
accepted and enforced
Products and services are conceived, developed, distributed globally
• Develop robust global marketing and branding strategy
• Develop global expansion strategy (‘footprint’) for affiliate expansion or consolidation
• Develop service models for affiliates at varying maturities; leverage IIA headquarters
and mature affiliates as well as regional offices
• Upon completion of NA Affiliate study, reassess global governance structure and
funding model
• Develop global membership policy, defining principles for all affiliates and the
monitoring process
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Timeline and Status
Activities
Timing
Status
March – April 2007
Complete
April 2007
Complete
April – July 2007
Complete
Global Board Update
July 14, 2007
Complete
Refine, map to current strategic plan, identify high
level implementation activities
July – August
2007
Complete
September 2007
In Progress
October 2007
Complete
Refine, discuss with Global Board
November 2007
Not Started
Refine, approval by Global Board
December2007
Not Started
Develop action steps to implement strategy,
including milestones
December 2007 –
March 2008
Not Started
Assign responsibilities for implementation
March – July 2008
Not Started
Draft preferred future state and develop key
outcomes
Develop discussion materials for broader exposure
and input
Solicit broad input, including Global Council
Solicit broad input
Refine, discuss with Executive Committee
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