Internal Audit in Post Pandemic

Recovery:
Risks and Challenges

Stephen Coates Immediate Past-President, IIA – Australia

Vice President, Asian Confederation of Institutes of Internal Auditors
Member, International Internal Audit Standards Board
stephen.coates@tragectory.com
 Internal Audit and Pandemics

WHAT’S A PANDEMIC? HOW ARE INTERNAL AUDIT & PRE-PANDEMIC – AUDITING BCP
PANDEMICS LINKED? AND PANDEMIC PREPAREDNESS
 When a pandemic occurs

1 2 3 4 5 6 7 8
Suspend work on Identify high-risk Tell management Take an active Become a real- Become a control Take off your Provide
the internal audit high priority you’re there to business time control monitor internal audit hat alternative
plan issues help continuity role advisor services
Post-pandemic – when the pandemic is controlled

INFORMING THE AUDIT STAFF ISOLATION

COMMITTEE
Kempsey
Shire
Council –
Case Study
Case Study – Kempsey Shire
Council
 Lessons learned

PROMPT AND CLEAR AND TIMELY COMMUNICATION TRUST AND

DECISIVE ALIGNED TRANSITION MUTUAL SUPPORT
 Risks and Challenges – The Internal Auditor

INDEPENDENCE: SHIELD FINDING BALANCE UNDERSTANDING GOING BEYOND REASONABLE

OR BARRIER BETWEEN INDEPENDENCE ADVISORY SERVICES ASSURANCE, PROVIDING SAFEGUARDS
AND URGENCY ADVICE
 Increased government spending

Risk and Competition for scarce resources

Challenges
– Local Workforce recruitment – future of
Government work
Supply chain resilience – future of
supply chains
 The Standards

Managing the Internal Audit Activity - Interpretation

• “The internal audit activity is effectively managed when: …It considers
trends and emerging issues that could impact the organisation.”

2000

2100

Nature of Work
• “…Internal audit credibility and value are enhanced when auditors are
proactive and their evaluations offer new insights and consider future
impact.”
 Core Principle 9
• Example enablers and key indicators to demonstrate a core principle:

PG-Demonstrating the Core Principles for the Professional Practice of IA – Institute of Internal Auditors
 Core Principle 9: Is Insightful, Proactive, and Future
Focused

How can Activity beyond Expanding local Future proofing Strategic Planning Feedback Consequences of
examining past the Strategic Plan, government’s risk business units. and Systems not being
transactions be emerging risks. assessment. Under insightful:
useful? Development.
Emerging risks are
missed
Value is limited
Loss of Board and
management support
 Commitment to improve the quality of internal auditors

High quality internal audit work

G20 Bali Summit – Presidency - Emerging Issues

Where are
we at? Climate change 40% v 22%

Very insightful – local government is very important in this,

internal audit must know about leading the conversation.

Meanwhile, some work from home continues

 Climate related risks and opportunities

Transition Risks Physical risks Opportunities

Policy & Legal Acute Resource Efficiency
Technology Chronic Energy Source
Market Products/Services
Reputation Markets
Resilience
 Governance: Is there a
How to support and
Expectations of clear understanding in
challenge senior
government(s) the organisation of
management
requirements

Climate Assurance: How does

the Board gain
Integration: How does
management build
Risk: Can management
demonstrate a robust

Change Risk
assurance over awareness across the assessment of climate
management actions? organisation? risk?

Improvement: How
does management
build experience and
learning?
Climate Change - Local
Government Internal Audit
Approach

Collaboration
Governance and
Integration and best
leadership
information

Risk
identification Risk treatment Risk monitoring
and assessment

Continual
Risk reporting
improvement

Expert led, repeatable approach, outcome focused,

 Improve Improve capability
Indonesian
Bureaucracy
Reform Grand Recruit Recruit wisely
Design 2010-
2025
Grow Grow your replacement

Develop Develop your skills

 • Perform forward looking internal
audit services
• Offer insights
• Actively seek innovation to
Next Steps improve your organisation
• Confirm you are demonstrating
the Core Principles
• stephen.coates@tragectory.com