The Path to Quality

1. The Path to Quality . . . a step-by-step guide toworld-class internal auditing

2. 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.

3. Achieving Quality Can 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

4. Maturity ModelLevels to Quality Level 1: Introductory Level 2: Emerging Level 3: Established Level 4: Progressive Level 5: Advanced

5. 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

6. 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

7. Steps to Introductory Quality • Adopt the definition • Achieve appropriate reporting structure • Commit to quality through the audit Charter • Acquire management’s buy-in • Educate the audit committee

8. 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

9. 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

10. Steps to Emerging Quality • IAA gets involved with The IIA and local chapter • CAE works toward certification • CAE attends QA Self Assessment training and/or seminar • Assign monitoring responsibilities • Use the Self-Assessment Checklist • Obtain feedback from others

11. 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.

12. 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

13. Steps to Established Quality • IAA staff certifications demonstrate IAA professionalism and competency • IAA uses Balanced Scorecard • Requires proper qualifications for validator • Develops plan for improvements and establishes timeline for implementation • Report QA validation to The IIA Quality (quality@theiia.org)

14. Board/Audit Committee • Expectations • Perspective on IA Roles • Satisfaction Surveys • Requests • Complaints MEASURES OBJECTIVES • Perspective on IA Roles • Satisfaction Surveys • Risk Concerns • CAE/AC Private Meetings Balanced Scorecard for Internal Auditing • List here. • List here. Internal Audit Processes Management/Audit Customers CORPORATESTRATEGY MEASURES OBJECTIVES MEASURES OBJECTIVES • List here. • List here. • List here. • List here. INTERNAL AUDITSTRATEGY • Importance Levels • Improvements • Findings • Repeat Findings • Savings • Quality Assessment • Experience • Education • Training • Certification • Reporting Relationships Innovation/Capabilities OBJECTIVES MEASURES • List here. • List here

15. 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

16. 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

17. Steps to Progressive Quality • CAE has CIA certification • Any gaps have been addressed and action plans are in place • Follow best & leading practices • A qualified external QA provider is used • Report completion of external QA to The IIA (quality@theiia.org)

18. 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

19. 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

20. Steps to Advanced Maturity • IAA maintains an appropriate mix of professional designations • IAA is a benchmark for progress to others in and out of their industry • IAA share tools and success story • Serve on QA review teams • Mentor, speak, research, and write for the profession of Internal Auditing

21. The Path to Quality • Add value • Be perceived as adding value • Ensure the value you add in the future

22. This Path to Qualitypresentation was developed by The Institute of Internal Auditors (IIA)Global Headquarters.