Opening Address by Ms Indranee Rajah, Senior Minister of State for Law and Finance at The Global Internal Audit Leadership Summit16 Nov 2016
16 NOVEMBER 2016, 9.00AM
MARINA BAY SANDS, EXPO & CONVENTION CENTRE
Mr Richard Chambers, President and Chief Executive Officer, Institute of Internal Auditors
Ms Tan Boon Yen, President, Institute of Internal Auditors Singapore
Mr Chaly Mah, Chairman, Singapore Accountancy Commission
Ladies and Gentlemen
Three Cs for the future of internal audit – Collaborating, Communicating and Creating
1. I am pleased to open the second Global Internal Audit Leadership Summit, and would like take this opportunity to congratulate IIA Singapore on your 40th anniversary. As the professional body and voice for the internal audit profession in Singapore, IIA Singapore has been instrumental in spearheading initiatives to grow the internal audit scene.
Importance of internal audit in governance
2. The importance of internal audit is critical, given the current backdrop of an increasingly volatile economy, and the accelerating pace of change brought about by digital disruption.
3. You are not unfamiliar with these trends and challenges. The Institute of Singapore Chartered Accountants (ISCA) commissioned a study on “The Profile of Audit Committees of Listed Companies in Singapore” last year. The findings were instructive. All the audit committee chairmen commented that internal audit could play a greater role. Many said that the audit committee could not have done its job well without the support of good internal audit. There is a need for organisations to recognise the importance of good governance, and how internal auditors contribute to the sustainability of businesses. But how can internal audit be ready for the future?
Collaborating with stakeholders
4. Today, let me share my thoughts on the three Cs for the future of internal audit. The first C is Collaborating.
5. I spoke at the Public Sector Internal Audit Conference in April this year, and I highlighted how internal audit can be a unique differentiating factor in an organisation. I had noted that internal audit leaders need to raise their competencies in being flexible, knowledgeable, and being a good strategic partner to the company management. According to a recent Census of Internal Audit Leaders by the Singapore Accountancy Commission (SAC), many respondents indicated that the ability to build collaborative relationships is an important attribute of the future internal audit leader.
6. So how can internal audit leaders to be strategic partners? For a start, the mind-set of internal auditors working in silos has to change. Internal audit leaders need to steer their teams towards building collaborative relationships with stakeholders, to better understand business processes, and align the internal audit team’s activities with broader organisational goals.
Communicating the value proposition of internal audit
7. That brings me to the next C on Communicating. To persons outside the internal audit teams, the work of internal audit may not be fully understood or indeed appreciated. The work could seem opaque. But internal auditors have a macro view of how the organisation works and the exposure and risks faced. Armed with the good understanding of the organisation’s business value chain, internal auditors can apply in-depth data analytics skills to glean useful insights on the trends and risks faced by the organisation. This will help cement internal auditors’ role as a unifying force, a trusted advisor and a business partner.
8. Understanding the organisation’s business model though is not sufficient. To improve communications with management and stakeholders, internal auditors also need to also develop a good understanding of the industry that the organisation operates in. I’m involved in the Committee on the Future Economy Legal and Accounting Services Working Group. And in our engagements, one point which resonated is the benefits of secondments. Short secondments to other departments within the organisation can help build up your industry knowledge. In short, having in-depth industry knowledge can be a powerful differentiating factor between one internal auditor and another.
Creating a talent pipeline
9. The third C is about Creating – Creating a talent pipeline of internal auditors. So some of you may have heard about the Singapore Skills Framework (SSF). One of the objectives of the framework is to help individuals make informed choices about career development and progression. Internal audit has been included as a key professional development pathway in this framework. This will help the profession to attract, and retain people from diverse backgrounds with varied skills.
10. On the academic front, IIA Singapore has partnered various academic institutions and professional bodies to offer internal audit programmes and electives. One good example is the internal audit elective offered by IIA Singapore and the Singapore Management University. It offers a platform for undergraduates to learn about the internal audit profession. Some of the students have chosen internal audit as their first career upon graduation, and that’s a good outcome. A one-off arrangement between IIA Singapore and ISCA to offer an accelerated pathway to be certified internal auditors attracted about 200 registrations. These figures are encouraging as they increase the talent pipeline for internal auditors.
11. Apart from having the necessary knowledge and skills, internal audit teams also need effective leaders. To strengthen the capabilities of the internal audit leadership role, I am pleased to announce that IIA Singapore and SAC will offer an inaugural mentorship programme for aspiring chief audit executives in early 2017. This will provide a platform for aspiring internal audit leaders to learn from their more experienced peers.
12. Ladies and gentlemen, I have highlighted the 3Cs which I think can chart the future of internal audit – Collaboration, communication of the value proposition of internal audit, and creating a talent pipeline.
13. I would like to end off with an African proverb “If you want to go quickly, go alone. If you want to go far, go together.” I believe with the support with IIA Singapore, SAC, ISCA and the organisations that you are working in, you can embark on your own 3Cs journey.
14. So thank you very much for inviting me, and best wishes for a most fruitful summit.