EVALUATING OBJECTIVES FROM TOP-DOWN

AND BOTTOM-UP

COMPANY SNAPSHOT

AXA Equitable Life Insurance Company

Industry: Life Insurance In business since 1859 (and part of the AXA Group since
2009 Sales: US$3.24 B 1991), AXA Equitable Life Insurance Company is a leading
2009 Total Employees: 5,139 financial protection company and one of the nation’s premier
2009 Audit Employees: 40 providers of life insurance and annuity products, as well
as investment products and services through its affiliates,
including, AXA Advisors, LLC. The company’s products
and services are distributed to individuals and business
owners through its retail distribution channel, AXA Advisors
and to the financial services market through its wholesale
distribution channel, AXA Distributors, LLC. For full year
2009, AXA Equitable recorded IFRS revenues amounted
to $13.1 B (€9.4 B) and contribution to AXA Group IFRS
underlying earnings
of $759 M (€549 M).
Operating in the United States, AXA also holds a majority
stake in Asset Manager, Alliance Bernstein.

From the AUDIT DIRECTOR ROUNDTABLE®

Source: AXA Equitable Life Insurance Company.
of the FINANCE AND STRATEGY PRACTICE
www.adr.executiveboard.com

© 2010 The Corporate Executive Board Company.

All Rights Reserved. ADR6353110SYN

12
 AXA Equitable’s
objectives and strategies
BUILD A HYBRID AUDIT PLAN
are evaluated in a top-
down, bottom-up audit AXA Equitable’s Top-Down and Bottom-Up Audit Planning Approach
planning approach.

■■ Evaluating business strategic

Company Objectives and Strategic Plan
plans and project proposals
allows Internal Audit to
verify that enterprise
objectives will be met.

■■ Management Interviews Evaluate Business Objectives,

provide the basis for a Strategies, and Projects
traditional risk assessment. Use business strategic plans and
project proposals to verify that they will
■■ AXA Equitable’s top-down, help achieve enterprise objectives.
bottom-up audit
planning approaches Objectives, strategies,
are interdependent. Management interviews and project proposal
clarify gaps in project Audit Plan reviews help Internal
proposal reviews Audit prepare for
management interviews

Management Interviews
Use management interviews
to evaluate risks associated with
organizational objectives, key activities,
changes in people, process, systems,
and the environment, and provide the
basis for a traditional risk assessment.

Audit Universe, by Function and Process

From the AUDIT DIRECTOR ROUNDTABLE®

Source: AXA Equitable Life Insurance Company.
of the FINANCE AND STRATEGY PRACTICE
www.adr.executiveboard.com

© 2010 The Corporate Executive Board Company.

All Rights Reserved. ADR6353110SYN

13
 AXA Equitable examines
business unit strategic
plans and supporting
projects to confirm link
to enterprise objectives.
■■ Internal Audit uncovers
assumptions in business
plans and projects to identify
strategic audit engagements.
■■ Internal Audit receives
all business project
proposals from the expense
management group.
■■ Further clarification about
a business strategic plan or
project is inquired during
management interviews.
■■ Business strategic plans and
projects will be added to the
audit plan if uncertainty or
impact is high.
From the AUDIT DIRECTOR ROUNDTABLE®
of the FINANCE AND STRATEGY PRACTICE
www.adr.executiveboard.com
© 2010 The Corporate Executive Board Company.
All Rights Reserved. ADR6353110SYN
TOP-DOWN AUDIT PLANNING APPROACH
Business Unit Strategic Plans and Projects Review Process
1 Review Business Strategic
2 Review Business Project
Plans Proposals
Evaluate alignment of plans Confirm business projects
to enterprise objectives. support business strategies.
Identify Risks and Identify Implicit Brainstorm Other
Validate Explicit Assumptions Critical Risks
Assumptions
Talk to management Use cross-functional
Verify supporting
to understand other perspective to identify
information provided
relevant assumptions other potential critical
in plans or project
and business drivers. issues.
proposal.
Sample Questions Internal Audit Uses to Evaluate Assumptions in Business Strategic Plans and Projects
Enterprise Level (Aggregate Level)
■■ Can we tie the project to the company’s strategic objectives?
■■ Can we validate the supporting information?
■■ Were the principles used in determining this course of action appropriate?
■■ What is the impact to the market segment?
■■ Is there recognition of changes to external assumptions (economic, regulatory, political)?
■■ What other critical issues could derail the strategies?
Business Level (Individual Level)
■■ What is the impact of initiative failures?
■■ What is the level of innovation involved?
■■ Is there recognition of changes to internal organizational factors (technical needs, social issues such as business
readiness for change)?
■■ What other critical issues could derail the strategies?
Source: AXA Equitable Life Insurance Company.
14
 Internal Audit’s focus on
objectives in its interview
process assists the
inclusion of traditional
and nontraditional
engagements in the
audit plan.
■■ Internal Audit asks
management detailed
questions around specific
initiatives, providing insight
into the potential success
and failure of strategies.
■■ Internal Audit completes risk
assessments after each
interview based on 10
factors, four of which
are related to enterprise
and BU level strategies.
■■ Assessment ratings inform
which risks and projects
are added to the audit plan.
From the AUDIT DIRECTOR ROUNDTABLE®
of the FINANCE AND STRATEGY PRACTICE
www.adr.executiveboard.com
© 2010 The Corporate Executive Board Company.
All Rights Reserved. ADR6353110SYN
BOTTOM-UP AUDIT PLANNING APPROACH
AXA Equitable’s Management Interview Process
Input: Interview Prep Packs Output: Risk Assessment
Consider enterprise and BU level strategies as well Complete based on enterprise and BU level strategies
as external and internal risks. as well as external and internal risks.
Interview Prep Pack Risk Assessment Survey
Enterprise and BU Level Strategy Department: Interviewee:
■■ Top 10 Strategies—A list of the most important IAD Team:
strategies for the company as well as from the
Date:
parent company
Factors Rating:
■■ Project Proposals—Details on proposed
Enterprise and BU Level Strategy
and approved projects and initiatives for
that business area 1. Organization Objectives L/M/S/H
External and Internal Risks and Key Activities
■■ Twenty Things to Think About—A list of risk 2. Business Plans-Short Term/Long L/M/S/H
areas or issues to consider in interviews based Term
on external research 3. Group Strategic Initiatives L/M/S/H
for AXA Equitable
■■ List of Critical Risks—Top risks identified and
assessed by the Operational Risk Management 4. Business Processes Changes- L/M/S/H
group Current/Future
External and Internal Risks
5. Organization People and Changes L/M/S/H
6. Systems & IT Environment L/M/S/H
Changes—Current/Future
7. Risks Identified with Operational L/M/S/H
Risk Management
8. Risks Identified by Group Audit L/M/S/H
9. Fraud Susceptibility L/M/S/H
10. Concerns/Requests/Comments L/M/S/H
Source: AXA Equitable Life Insurance Company.
15