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Update on The IIA And The State of The Global Profession

Richard F. Chambers, President & CEOThe Institute of Internal Auditors

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Overview

• The Global IIA Footprint in 2015

• The Global Headquarters Update

• Key Trends in The Global Profession

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The IIA Global Footprint in 2015

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Source of Data

Global Membership

Data (February

2015)

1Global

CertificationData

(March 2015)

Global Financial Reports (2014)

Annual Institute Activity Reports (2015)

2

3 4

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The Global IIA in 2015

180,000+

MEMBERS

170COUNTRIES

106

INSTITUTES

159 CHAPTERS

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Institutes by the NumbersBy Region

By Associated Organization

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Members By RegionsFebruary 2015

*North America includes US, Canada and chapters in Caribbean

Region Institutes Members

Africa 24 13,291

Asia/Pacific 18 30,775

Central/South America 18 13,254

Europe 39 48,431

Middle East 7 6,000

North America* 2 72,586

Members at Large N/A 1,908

Worldwide Total 108 186,245

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Members by Primary Language

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5-Year Regional Membership Trends

- 2% - 1%

+ 10%

+ 21%

+ 16%+ 5%

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5-Year Global Membership Trend

+16,000 members+9%

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Global Certifications & DesignationsMarch 2015

CIA: 130,000

CRMA: 14,200

CCSA: 6,700

CFSA: 6,200

CGAP: 3,900

QIAL: 45

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2014 Global Financial Position

• $138.9 million in global revenue, 3% increase • $11.4 million of net contribution, -10% increase• $151 million in total assets, 10% increase • $110.2 million in net assets, 10% increase

*Combined statistics from Institutes, NA Chapters, and IIA Global HQ for FY ending in 2014

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Top Revenue Components Worldwide

Membership32%

Global Certifications

7%

Seminars & Conferences

46%

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Development of the Profession(% of Countries in Each Region)

Source: 2014 Activity Reports

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IIA Global Headquarters Update

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2014 Was a Year of New Initiatives

• Since the 2014 Global Council, IIA Global HQ launched:• The Qualification in Internal Audit Leadership (QIAL) • The Risk Resource Exchange• Internal Auditor Magazine’s Optimized Website• Prototypes for Future Global Services:

• Career Map• The American Center for Government Auditing (ACGA)

• Finalized MRA’s with 105 institutes• Hosted London International Conference• Exposed “IPPF Relook” recommendations• Facilitated a new Global Strategic Plan• Released 9 Research Foundation reports and 7

educational products & books

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In 2015 – More New Initiatives

• We Plan to Launch:– International Chapter Program– Global Thought Leadership Series– IIA Global SmartBrief– Part 1 CIA Reciprocity– ACCA Challenge

• We also Plan to:– Introduce the Self-directed Learning

Platform for Institutes– Pilot Global Application for Career Map– Craft the African Development Initiative– Host the International Conference in

Vancouver

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IPPF: Enhancements

• Addition of:– The Mission of Internal Auditing– The Core Principles for the Professional Practice of Internal Audit– Capability to produce Emerging Issues content (not part of IPPF)

• Introduction of:– Implementation Guidance (replaces/enhances Practice Advisories)– Supplemental Guidance (replaces/enhances Practice Guides)

• Removal of Position Papers from IPPF

• Renaming Key Element:– Strongly Recommended to Recommended– (no change to Mandatory elements)

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The Revised IPPF

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IPPF Enhancements: Next Steps

3/2015 IIA Global Board Approval

5/2015 Final Report – Available for Translation

7/2015 Final Report – Issued

7/2015 Proposed Launch IPPF (Vancouver)

7/2015 – 12/2016

Implementation and conversion activities

For more information: www.globaliia.org/NewFramework

For more information: iia-exposure@theiia.org

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CBOK 2015: Practitioner Survey Update

• Over 14,500 responses– 2,586 CAEs and 1,457 Directors / Sr. Managers – 3,725 Financial Services; 871 Public Sector– 2,737 NOT IIA members

• Regional participation 30%

23%

20%

13%

7%

7%

Asia & Pacific

Europe

North America

South & Central America

Africa

Middle East

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CBOK Key Dates - 2015 & 2016

• Practitioner Study– Publish first results – Vancouver July 2015– Data visualization tool launch – Q3 2015

• Stakeholder Study– Study begins – Q3 2015– Publish first results – Q1 2016

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Join us in Vancouver next year for:

Mountains of Opportunities….

Oceans of ChangeVisit www.ic.globaliia.org for details

Vancouver 2015

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2014: Key Trends in Internal Audit

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2015 Global Survey Demographics

• Conducted in Collaboration with CBOK, March 2015– 7th consecutive year– Nearly 70% public/ private

companies– Over 3900 responses from

heads of internal audit and audit directors

Data as of 27 March 2015

• Geographic Distribution– 29% Europe– 22% North America– 13% Latin America– 23% Asia Pacific– 7% Africa– 7% Middle East

• Key Industries– 30% Finance and Insurance– 14% Manufacturing– 8% Public Administration– 5% Health Care

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Preliminary Thoughts from the CBOK/Pulse Data

• The resource outlook is strong• The profession’s focus remains diverse• More emphasis is needed to audit at “the speed of

risk”• Talent profiles are continuing to evolve• The emphasis on quality assurance is lagging

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Outlook for Internal Audit Resources Remains Strong

• Budgets:

• Staffing:

Increase Stable Decrease

Overall 40% 48% 12%

Change from 2014-2015

Increase Stable Decrease

2014-15 29% 57% 12%

2015-16 33% 59% 5%

Changes Experienced and Projected

Source: “The Pulse of the Profession: © 2014 The IIA Audit Executive CenterSource: The Global Pulse of Internal Audit Survey Conducted in collaboration with the 2015 Common Body of Knowledge Study, © 2015 The IIA and The IIA Research Foundation. All rights reserved. No part of this data may be copied, reproduced or otherwise disseminated without explicit permission from The IIA.

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Despite Resource Growth – Concerns remain

• Sufficiency of funding for internal audit compared to responsibilities?– Not sufficient at all – 14%– Somewhat sufficient – 52%– Completely sufficient – 31%

• In addition – 40 percent have used a third-party provider to augment staff

• 28 percent have formal or informal rotation programs

Source: The Global Pulse of Internal Audit Survey Conducted in collaboration with the 2015 Common Body of Knowledge Study, © 2015 The IIA and The IIA Research Foundation. All rights reserved. No part of this data may be copied, reproduced or otherwise disseminated without explicit permission from The IIA.

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Operational 24%

Compliance/ Regulatory 15%

Financial 10%

Business Strategy 11%

Risk Mgt Effectiveness 12%

Information Technology

8%

Corporate Governance 6%Other 9%

Fraud 4%

2015 Audit Plans Continue to Diversify to Address Key Risks

Source: The Global Pulse of Internal Audit Survey Conducted in collaboration with the 2015 Common Body of Knowledge Study, © 2015 The IIA and The IIA Research Foundation. All rights reserved. No part of this data may be copied, reproduced or otherwise disseminated without explicit permission from The IIA.

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More Emphasis Needed to Audit at the “Speed of Risk”

• Only 48 percent rely on comprehensive risk assessments by internal audit– 18 percent on management’s risk assessments– 26 percent on focused risk assessments

• When developing the internal audit plan:– 21 percent develop once per year – do not update– 43 percent develop and update 1-2 times per year– 18 percent develop and update 3 or more times– Only 15 percent consider their plans “highly flexible”

• Only 21 percent “continuously” assess risksSource: The Global Pulse of Internal Audit Survey Conducted in collaboration with the 2015 Common Body of Knowledge Study, © 2015 The IIA and The IIA Research Foundation. All rights reserved. No part of this data may be copied, reproduced or otherwise disseminated without explicit permission from The IIA.

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Talent Profiles are Continuing to Evolve

SKILLS BEING RECRUITED RATE

1 Analytical/critical thinking 66%

2 Communication 53%

3 Risk Management Assurance 42%

4 Accounting 42%

5 IT - General 38%

6 Industry Specific Knowledge 37%

7 Data Mining and Analysis 33%

Source: The Global Pulse of Internal Audit Survey Conducted in collaboration with the 2015 Common Body of Knowledge Study, © 2015 The IIA and The IIA Research Foundation. All rights reserved. No part of this data may be copied, reproduced or otherwise disseminated without explicit permission from The IIA.

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The Emphasis on Quality Assurance is Lagging

• How developed is your Quality Assurance and Improvement Program?– 28% – non-existent or ad hoc– 34% – in the process of development– 33% – well-defined; including an external

assessment

Source: The Global Pulse of Internal Audit Survey Conducted in collaboration with the 2015 Common Body of Knowledge Study, © 2015 The IIA and The IIA Research Foundation. All rights reserved. No part of this data may be copied, reproduced or otherwise disseminated without explicit permission from The IIA.

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Questions?

The Institute of Internal Auditors

Richard Chambers, CIA, QIAL, CGAP, CCSA, CRMA

President & Chief Executive Officer

richard.chambers@theiia.org

@RFChambers