European Regional Forum

Budapest, Hungary

October 2014

Sylvia Gonner, Vice President, Global Relations

Kevin Mayeux, Chief Officer and General Counsel

Angela Witzani, Vice Chair, Professional Guidance, IIA Executive Committee

Agenda

1. A look at the Value of Affiliation

2. From Dubai … to Budapest

• IPPF Relook

• Project Umbrella

• Global Advocacy Initiatives

• Strategic Planning

• Member Value Proposition

3. Other Project Updates

• Certifications

• CBOK 2015

• Master Relationship Agreement (MRA)

4. Questions and Answers

The Value of your Affiliation

The Value of your Affiliation

Core Benefits and Services (Funded by Institute Fees)

– Advocacy

– Guidance and Ethics

– Global Governance

– Institute Relations and Development

– Support services: • Customer relations,

membership, legal, accounting, marketing, website administration, IT

Other Benefits and Services (Funded by other sources)

– Knowledge and Research

– Certifications

– International Conference

– And much more….

Advocacy

The IIA’s global advocacy strategy focuses on collaboration

with Institutes to build relationships with key stakeholder

groups at the national and international levels.

Global Partnerships

1. International Federation of Accountants (IFAC)

2. Financial Stability Board (FSB)

3. International Integrated Reporting Council (IIRC)

4. Regulators/Listing Organizations

5. Organization for Economic Cooperation and Development (OECD)

6. International Organization of Supreme Audit Institutions (INTOSAI)

7. Association of Chartered Certified Accountants (ACCA)

8. Information Systems Audit and Control Association (ISACA)

9. Global Reporting Initiative (GRI)

10. International Organization of Security Commissions (IOSCO)

Advocacy

Elevating the Profile of Internal Auditing • Each year in May, The IIA, dozens of Institutes, and thousands of members

around the world celebrate International Internal Audit Awareness Month.

• This year, 12 Institutes were recognized in the inaugural Building Awareness Champion program for exhibiting outstanding commitment to advancing the profession.

2014 Champions

IIA China · IIA Costa Rica · IIA Cyprus · IIA Greece · IIA Mauritius

IIA Panama IIA Philippines · IIA Qatar · IIA Singapore

IIA Slovenia · IIA Swaziland · IIA Turkey

Standards & Guidance

The IIA sets the standard for how internal auditing

is practiced around the world through the

International Professional Practices Framework (IPPF)

• Maintaining the IPPF current – The IIA released exposure draft outlining proposed enhancements to the IPPF

• Practice Guides

– Since 2009, there have been 41 Practice Guides released

• Practice Advisories

– Since 2009, there have been 62 Practice Advisories released

• Position Papers – 3 have been published and translated into multiple languages

• Global Public Sector Insights

– Since 2011, there have been 8 insight reports released

Global Governance

Global Council

– Allows all Institutes to have

a voice in The IIA’s

strategic initiatives.

– 40 Institutes* offered

funding to ensure their

participation annually.

*Showed proof of financial assistance

needed.

Global Relations and Development

• Institute Relations

• Number of Institutes

has tripled in the past

25 years (from 31 in

1990 to 106 in 2014)

• Strongest growth in

Africa, Middle East,

Eastern/Central Europe

180 000 + Members

190 Countries

106 Institutes

Global Relations and Development

• Relations with Regional Organization

– ACIIA, ECIIA, FLAI, UFAI

– New groups AFIIA and Arabic Group

• Capacity Building

– The 2014 African Workshop assisted 18 Institutes in better managing

their operations.

– Additional capacity-building workshops in other regions to come in

2015.

Institute Services

• Global Website www.globaliia.org (launched in 2012)

– Advertise and review Institute conference, publications, services

• AuditChannel.TV (launched in 2012)

– Includes a channel dedicated to Institutes

• Institute Center (launched in 2013)

– To ensure that members can instantly benefit from services and discounts, the Institute Center was created to give Institutes 24/7 access to directly manage their membership records.

Institute Services

• Internal Auditor magazine (hard copy and online)

• Bulk subscription for Institutes available at cost

• Complimentary for Top Elected Officer and Contact Person

• 2 hard copies of each issue mailed

• Free access Ia Online on the

new website (www.internalauditor.org) and mobile app.

• Institute Libraries

• About 5000 books shipped free of charge to Institute libraries in the past 5 years.

Asset Protection

One of The IIA’s most valuable assets

is our Intellectual Property (IP) and our Trademarks

A total of 201 trademarks in 56 countries have been

registered, providing legal protection to Institutes’

exclusive right to use IIA trademarks and IP.

Knowledge & Research

Annual survey of trends

and emerging issues in

internal auditing

There is a constant flow of cutting-edge knowledge

available to Institutes and their members worldwide.

30 proposed deliverables

expected from 2015 study

Knowledge & Research

• IIA Research Foundation publications and research reports

– IIARF published 13 free research reports in 2013-14.

– The latest releases are: • “Global Corruption Law Compliance Report: Insights from the Middle Market”

• “The Value of Quality Assurance and Improvement Programs: A Global Perspective”

• “Internal Audit Around the World: A Perspective on Global Regions”

• “Adapting Internal Audit to Organizational Governance: Best Practices of 9 Leading

Organizations in Europe and the U.S.” (Coming soon)

Certifications

The IIA’s global headquarters provides support to Institutes

worldwide to manage certification programs that are efficient,

relevant, and help to elevate professionalism of internal audit

• Two new Certifications launched! (CRMA and QIAL)

• Administration of the Candidate Certification Management System (CCMS) – the system of record for all global certification activities.

• CCMS candidate-facing screens available in 11 languages (6-7 new in 2015)

• Launch of Institute Center reduced certification processing time from 14 days to 1½ days.

• Coming soon: Non-agreement Institutes will be provided with monthly certification reporting.

From Dubai …

to Budapest

Update on various Global

Council discussions

–Topic review

–What you told us…

–What we did…

–What is next …

IPPF

What You Told Us…

What is the impact of potential changes to the definition or structure of the IPPF?

1. The opportunity to reflect changes in the profession itself and to address

shortcomings of the current definition if it were shorter, simpler, and added focus

on external stakeholders and the future of the profession.

2. Potential to negatively impact audit charters, legislation, and translations that

would need to be updated and in some cases about the damaging perception

that change itself can create.

3. Desire to have more industry specific guidance/Standards and the need to

better influence, educate, train, support, and inform audit committees.

What We Did…

1. Proposed enhancements includes the addition of a Mission Statement to provide a clear and succinct description of what Internal Audit aspires to achieve within an organization.

2. Maintain existing definition of internal audit because it is fundamentally sound and currently recognized in legislation, regulation and statutes in various part of the world.

3. Restructure current Practice Guides to become Supplemental Guidance. Supplemental Guidance would be intended to address topical areas, as well as sector-specific issues.

IPPF Exposure Draft

What has been exposed:

• Addition of: – The Mission of Internal Auditing

– The Core Principles for the Professional Practice of Internal Audit

– Capability to produce Emerging Issues Guidance

• Introduction of: – Implementation Guidance (to replace and enhance

Practice Advisories)

– Supplemental Guidance (to replace and enhance Practice Guides)

• Removal of Position Papers from IPPF

• Renaming Key Elements: – Mandatory to Required

– Strongly Recommended to Recommended

Help With the Exposure

1. Download the Exposure Document and share with your members and local community (See Toolkit with samples and documents in multiple languages)

2. Share the video with your members

3. Encourage your members to respond to the questions and comments that support answers

4. Remind your members that they can submit a separate comment letter if so desired

5. Feedback deadline: Nov. 3, 2014!

Next Steps

1. Taskforce meeting 13 – 14 November to discuss exposure

feedback and decide on each element

2. Make recommendation to Executive Committee and Board at

Midyear on path moving forward

3. Implementation timeline dependent on conclusions

Project Umbrella

Project Umbrella Objective

Provide a recommendation to the Board of Directors on the

possibilities of The IIA expanding its services to address those

members and other professional that are currently involved or

will be involved in the 2nd line of defense disciplines –

compliance, risk management, and internal control.

Strategy B.3

Address the needs of different sectors within the internal audit or related

professional activities.

What You Told Us…

1. 76% indicated their Institutes provided “some to extensive content” in the area of risk management.

2. 93% indicated their constituents were interested more in the subject of risk management than

compliance or internal control.

3. 92% stated The IIA should place a medium to high priority on investing in risk management content.

4. It is important for The IIA to invest in content that consisted of leading practices, benchmarking data,

evaluation tools, and standards and guidance. Leading practices and evaluation tools rated the

highest with 84% of the respondents indicating it was very important; standards and guidance rated

next with 78% indicating it was very important; and benchmarking rated last with 69% indicating it was

very important.

5. 63% of Institutes responding expressed interest in supporting the development of risk management

content with time, money, or expertise.

What We Did…

• Explored three potential options

– North American center of excellence for risk management

– Global center of excellence for risk management

– New international association for risk management and assurance professionals

• Held discussions with GELT and Executive Committee in London

• Concluded a Global Center of Excellence would provide the greatest long-

term strategic impact, but must first demonstrate our in-depth knowledge of

issues around risk

– Short-term: Create a global online risk resource site

– Long-term: Establish Global Center of Excellence for Risk Management

Project Umbrella Update

• Global Risk Resource Exchange

– Online resource similar to COSO model

– Access to global products and services • Informative blogs and videos

• Training

• Conferences and events

• Publications and thought leadership

• Timely newsfeeds

• Benchmarking data

• Complementary outside resources relevant to risk management issues

– Target audience (Initial) • Current CRMAs and IA Serving in Risk Management Roles

Next Steps

• Two-Phase Approach to Develop a Virtual Exchange

– Phase 1 – Launch – (4th quarter 2014) • Inventory of current IIA products and resources (HQ and Institutes)

• Identification of projects under development (HQ and Institutes)

• Website build-out

• Communication plan

– Phase 2 – Support and Refresh – (2nd quarter 2015) • Co-branding opportunities with Institutes

• Content review

• Identification of additional offerings, including external resources

• Newsfeeds and benchmarking tools in the form of information graphics

Advocacy Initiatives

Advocacy Strategy

Collaborate globally to identify and confirm stakeholder

needs/expectations, develop an advocacy platform, and identify

and engage appropriate and influential bodies/organizations to

advance the interests of the internal audit profession

2012-2016 Global Strategic Plan: Goal C

The IIA will have positively raised the profile of, and demand for, professional

internal auditing, globally.

What You Told Us…

• The Support you expect from IIA Global includes…

– A visit by a global representatives rates as a top service IIA Global offers

Institutes. Global leaders to speak at Institute conferences and visit with local

stakeholders/influencers

– Channels for sharing and benchmarking best practices and lessons learned

among Institutes

– Tools, resources, documents, videos, articles

– Updates on global initiatives with key targets – IFAC, INTOSAI, IIRC

– More collaboration with associated organizations (ACIIA, Arabic Group, AFIIA,

ECIIA, FLAI, UFAI)

What We Did…

75 %

of Institutes have been visited

by a global representative

in the last 5 years

in support of their events and local advocacy efforts

Representative from

each Associated Organization

holds a seat on the Global Advocacy Committee

to enhance collaboration efforts.

What We Did…

NEW!

Advocacy News

– Latest global

advocacy efforts,

toolkit, videos,

responses to

regulators, fact

sheets, etc.

Resources are

continually

added.

What We Did…

NEW TOOLS!

• Updated Branding

Guidelines (Manual)

and PPT/letterhead

templates

• Create a standard

PPT presentation

about The IIA for use

by Institute leaders

Advocacy Updates

Recognition – Engagement – Awareness

• Submitted business case to FSB for inclusion of IIA Standards in Compendium of Key Standards

• Hold seat on IIRC to influence IA role around assurance of <IR>

• Participated in Phase I of OECD Study on the Role of SAIs in Fostering Good Governance

• Richard Chambers addressed IFAC’s Board of Directors.

• Established work plan to with IFAC that identifies initiative to further engagement and collaboration efforts outline in an updated MoU

• Opened discussions with ACCA to identify collaborations opportunities.

• Richard Chambers addressed the delegates of INTOSAI’s INCOSAI event in Beijing.

• Executed updated MoU with INTOSAI’s Professional Standards Committee.

2015 Strategic Planning

Strategic Planning Overview

Purpose:

• Internal Auditors from around the world met to discuss the path for The

IIA over the next five years. The group discussed updating the 3 to 5

year planning horizon including drafting goals, strategies and indicators

of achievement.

• The group met 22 – 23 August 2014 in Orlando, Fla, US.

• 31 Attendees – 70% Volunteers + 30% IIA HQ Staff and Institute Paid Staff

– Regional representation: Africa: 10%, Asia/Pacific: 10%, Europe: 29%, Latin

America: 3%, North America: 24%, Global HQ: 24%

What You Told Us…

1. Be more proactive and visionary.

2. Engage outside stakeholders in strategy development.

3. Incorporate feedback and perspectives from members at the

grassroots level because they have direct knowledge of the needs of

the organization they serve.

4. More alignment and partnership among IIA Institutes is needed in

developing the plan to better balance local and global needs.

5. Create awareness for the profession and proactively lead through the

development of insights.

What We Did…

1. Explored broader issues and trends globally with an invited Futurist

2. Included external perspectives:

– from stakeholders,

– Audit Committee Chair

– input from global advocacy partnering organizations

3. Provided session participants with preliminary, pre-read information to

review prior to attending strategic planning sessions.

4. Invited global leadership representing 17 Institutes to ensure goals

were strategic, relevant and in support of a more collaborative focus.

5. Conducted a pre-session survey, Global Internal Audit Priorities, from

which findings will be leveraged to support goal prioritization.

Progress to Date

During the Strategic Planning Session:

1.The IIA’s Core Purpose was evaluated

2.The Core Values were evaluated

3.The Vision was evaluated

4.Five strategic goals were drafted

5.Potential measurements for success were discussed

Next Steps

1. The strategic plan will be shared with the Executive Committee for

approval in October 2014

2. The Executive Committee will recommend the approved strategic plan

for approval by the global board of directors.

3. Defining the appropriate role Institutes play in executing the strategic

plan

4. Developing implementation approach for the approved strategic plan

5. Strategic plan implementation

Member Value Proposition

What You Told Us…

• Gave input on the Definition of Minimum Service and Benefits to members

• Expressed concern over the availability of services to members in some

parts of the world

• Highlighted lack of resources, tools, and support* (primarily form volunteer-

operated Institutes)

• Confirmed that IIA Global should continue to focus on developing institutes

and serving as a knowledge center and broker

• Requested a tool for Institute Leaders to continue to network online

*We learned that many services, resources and available support

are not known to Institute leaders

What We Did…

1.Filled all the open positions in the Global Relations Team

– Total of 5 staff multilingual and multicultural staff

2.Created a Communication Strategy:

– Enhanced the induction of new Leaders

– Quarterly Institute Briefings

– Improved content and layout of Global Leaders Link

– Added “Did you Know” to Global Leaders Link to highlight existing resources

– Global Connections newsletter delivered directly to member upon request

– Institute Value Proposition campaign started

– Added Toolkits to Institute Leader Website

Next Steps

COMING SOON!

• Restructured Institute Leaders Website

– More user-friendly with archives by topic

– More resources

• Enhanced onboarding/induction of new leaders (and existing ones!) via

online videos and teleconferences with Institute Relations staff

• Share repository of 100 membership retention and recruitment tips

• LinkedIn Group dedicated to Institute Leaders Only.

Alternative Member Servicing Model

1.Moratorium on the formation of new Institutes in place since March

2013 – More than 30 groups waiting.

2.Many small, newer Institutes struggling to build stable, sustainable

Institute, deliver minimum service to members, meet formation

requirements.

3.New Model under development. Concept approved by the Executive

Committee in July. Business plan under development.

4.Concept: Greater partnership between global and local chapter to

deliver minim services to members immediately while allowing time to

build local infrastructure and necessary reserves.

5.Expected launch in 2015.

Certification Update

Qualification in Internal Audit Leadership (QIAL)

• Marketing materials added to Institute Leader Resources

section of the global website

• MRA Addendum (under development)

• Outlines 3 participation tiers

• Promotion – minimum required level

• Cooperation – provide computer/web ex services for candidates that do not

have access for case studies, panel interviews and presentations.

• Partnership – manage candidate panels

• Each tier has certain requirements

• Legal review in process and will share with Institutes once it is approved

QIAL Applications

Applications Applications in Process

Practice Exams (new service)

• English and Japanese languages launching in 4th quarter 2014

• Candidates will have to register and pay through CCMS in order to gain

access to the practice exams

• Not diagnostic but simulate the actual PV test environment

• Other languages will launch in 2015

Certification Reports (new service)

• Institute leaders will have access to 4 monthly reports that will be emailed to the contact person who will then forward to the person responsible for promoting certifications

• The 4 reports are: – Candidate Demographic Data

• All demographic data for a candidate (name, address, email, telephone, etc.)

– Exam Status Report • Details EXAM level status for a candidate (eligible, registered, exempt)

– Newly Certified Report • Details candidates who have achieved certified status in one of the certification programs for the previous

quarter

– Program Status Report • Details PROGRAM level status (applied, approved, inactive, etc.) for a candidate

• Planned launch: 4th Quarter 2014

Part One Stand Alone (POSA) - NEW

• Not a certification, instead will be considered a designation

• No printed certificate – E-certificate and badge

• Valid for 2 years with one 2-year extension

• 6 months experience required to receive designation

• Title: Internal Audit Specialist (to be approved)

• Requires Executive Committee and Board of Directors approval

• Planned launch: 1 January 2015

Part One Reciprocity - NEW

• Only for those local programs that have been approved by the Professional

Certifications Board and Board of Directors

• Initial application and then annual renewal

• Program will be evaluated on a number of items including

oRigor of exam development process

oProcess of item validation and replacement

oCPE requirements

• If approved, candidates will have to apply for Part 1 (much like Part 4 credit)

• Requires Executive Committee and Board of Directors approval

• Planned launch: 1 January 2015

Guidelines for Approved CPE Providers - NEW

• Includes Institutes and third parties

• Establishes guidelines for CPE’s which will be automatically

accepted for global IIA Certifications

• Guidelines around what counts as a CPE (# of minutes),

preparation, marketing, instructor qualifications

• Requires linkage to the Competency Framework

• Streamlines reporting for candidates that are selected for audit

• Eventually, approved providers will be able to report into CCMS

directly as file upload

• Launch 1 February 2015.

ACCA Challenge Exam

• Global Advocacy Committee met with Association of Chartered Certified Accountants (ACCA) in September 2013 – Discussed collaboration opportunities

– ACCA has 48,000 members engaged in internal audit worldwide

• Professional Certifications Board approved request to offer a challenge exam based on the submission of a formal proposal in August 2014

• What is a Challenge Exam?

– a single exam, one-time offer, restricted to ACCA certified members

– customized to eliminate knowledge, skills and abilities already demonstrated and focus on knowledge specific to internal audit

ACCA Challenge Exam

• Why do it?

– Primarily an advocacy effort

– Enhance knowledge of our Standards for chartered accountants practicing internal

auditing

– Opportunity for Membership growth

• Who is affected

– Primary European countries: UK, Czech Republic, Greece, Switzerland

• How it would work?

– Availability: 1 Month exam window – May 2015 (proposed)

– Location: PearsonVue sites using CCMS

– Package: Bundled application, registration, certification fees, customized training,

membership in local Institute

The Global Internal Audit

Common Body of

Knowledge (CBOK)

What You Can Expect From CBOK

Will be available

in 25+ languages!

Protiviti recognized

as strategic partner

Now available!

Master Relationship Agreement

MRA Deadlines and Process

• Master Relationship Agreement

– MRA Form must completed with information to customize your MRA

– Two copies of MRA being mailed via post to your Institute for signature

– DEADLINE: Sign and return 2 copies by mail by no later than 1 December

– IIA Global HQ to sign and mail one copy back for Institute Records

• Effective 1 January 2015, all current agreements will become null and

void.

MRA and Addenda

• MRA – 2 copies (delivered and returned by mail) must be received by December 1

• Effective 1 January 2015, all current agreements will become null and void.

• Addenda:

– MANDATORY CERTIFICATION (Institutes must select one) • Addendum A Certification Promotion Agreement

• Addendum AA Certification Administration Agreement

– Addendum B Global Training Marketplace Agreement

– Addendum C Audit Executive Center Agreement

– Addendum D Published Works Agreement

– Addendum E Reprint and Translate Ia Magazine Agreement

– Addendum EE Volume IA Magazine Subscription

– Addendum F Research Foundation Promotion Agreement

– Addendum G Quality Services Partnership Agreement

– Addendum GG Quality Services Agreement

Save the date ….

GLOBAL COUNCIL 2015

12-15 APRIL

BEIJING, CHINA

Questions - Comments

Sylvia Gonner, Vice President, Global Relations

Kevin Mayeux, Chief Officer and General Counsel