The AC and Internal Audit Services.

It's CNY, found myself at Open Houses, one of which I was in the midst of Audit Committee members. After the normal blah blah blah, the topic meandered to the new regulations and what was needed to be done. 

It was very comical, I thought, that AC members did not know that their performance needed to be reviewed by the Nominating Committee and that there were those that thought how ironical it was that they would be reviewing themselves, simply because many companies do not have sufficient independent directors to keep the Nominating Committee and Audit Committee membership separate. Oh well, I suppose there will be some creativity, lets wait and see and see what Bursa will do about it.

More interestingly is when the topic of IA quality reviews were discussed I found out that the IIA(M) was peddling this service! I, as with many professional, find this unthinkable, that an institute formed to promote, educate and certify practitioners of a particular profession would themselves be undertaking the very services that they certify. This would be like the Institutes of Chartered Accountants or The Certified Accountants Associations undertaking statutory/external audits! 

To better understand why this Institute was at odds with the norm, I did my Inspector Clouseau stuff and this is what I found out.

1. Yes the IIA(M) undertakes such because the world IIA body does similarly, so its permitted.

2. Does the IIA(M) have a team of professional staff to undertake the engagements? No the rely on a team of contractors.

3. How does the IIA(M) ensure quality, I am told that it is done via its secretriat that has certifiers!

4. I was further told by my informent, "we don't get involved with this becuase it really is a tick the box approach. So much for looking at the qualitative approach, and the SC saying that the MCCG should not be embraced with a tick the box approach! 

I would even place a wager that the Quality Review is based on the Guidance on Internal Audit Function that can be found on BM's website. Personally I thought it was a very poor document and I was totally surprised that BNM, SCM and BM would lend their name to it, this especially so when BNM in the late 90s came out with a GP on IA that was world class.

Finally I wish AC members all the best as under revised rules they will be required to not only approve the Internal Audit Plan but also the IA Program!