POLITICS AND

INTERNAL AUDITING
VICCI M. TOMAS
PRESIDENT AND COO, Splash Corporation
October 19, 2016
AGENDA
• IIA Survey Results
• Putting into context
• Extent of political pressures
• Survival Kits
• Concluding thoughts
IIA SURVEY RESULTS
• 54.7% - directed to omit or modify an important audit
findings
• 49.0% - directed to not perform audit work in an area
that the CAE viewed as high risk
• 31.5% - directed to perform work in a low-risk area so
that an executive could investigate or retaliate against
another individual
POLITICS AND INTERNAL AUDITING
• The situation in which individuals in leadership
exercise their authority to achieve a personal benefit,
or to protect an organization, by attempting to
manipulate the internal audit activity or internal audit
reports.
• Such manipulation may result in actions to restrict the
scope of audit activities, suppress audit findings, or
undermine the credibility of the CAE or the internal
audit activity.
EXTENT OF POLITICAL PRESSURES
• Political pressure on CAEs is extensive and pervasive
• Political pressure comes in many forms
• Political pressure will always exist
• Organization, technology and organization objectives
change
SURVIVAL KITS
• Foundational
• CAE Attributes
• Internal Audit Function
FOUNDATIONAL
• Good corporate governance
 Tone at the top
 Corporate culture
• Clear reporting relationships
 Board of Directors / Audit Committee
• Clear and supportive Charter
 Scope
 Access to information
CAE ATTRIBUTES
• Integrity and courage
• Objective and fair
• Relationship builder thru effective communication
• Sound judgment
• Anticipates and proactively addresses issues
INTERNAL AUDIT FUNCTION
• Effective communication
• Staffing – rigorous selection and training
• Add value to the organization
 Think strategically
 Know the business
 Provide fact based conclusions with clear business
implications
 Present alternatives
 Jointly find solutions
CONCLUDING THOUGHTS
• Political pressure will always be present
• Good corporate governance is critical
• Professional competence is not sufficient
• Effective communication is more than report writing
• Continuously align internal audit work with
organizational objectives
QUESTIONS?
THANK YOU!!!
THANK YOU!!!
Question (SMS):
• Is the compliance function also the role of Internal
Audit? Is the Compliance Committee same as the role
of Audit Committee?
Question (SMS):
• Hi Ma’am, you mentioned “be prepared to lose your
job” in relation to organizational politics. How should
you do it but still would want to be within the IIA
Standards?
Question (SMS):
• You mentioned that to survive organizational politics
starts with hiring, what “qualities” of applicants
should we look for?