Volume 73, Issue 1

August 2016

Chapter President’s Message Dear Friends and Colleagues,

I am humbled and honored to assume the role of President of the Los Angeles Chapter of the Institute of Internal Auditors. I am also grateful to our recent past Presidents (Arnold J. Blanshard and Larry C. Herzog Butler), our Board of Governors, and most importantly our great team of Officers and volunteers that are passionate about serving this chapter’s members on top of their professional and personal responsibilities. Their commitment to you has led this chapter to again achieve Platinum status which represents several years of meeting the IIA’s highest chapter standards. As the largest Southern California chapter and one of the longest established chapters celebrating its 73rd anniversary next month, I couldn’t be more excited to lead the mission to serve our community and profession. This year the IIA also celebrated its 75th anniversary where it all began, in New York City (and my home town), with the 2016 IIA International Conference where they celebrated our past and aimed to inspire future generations.

Our last chapter year (2015/2016) was our best year yet for the LA Chapter, with the majority of our monthly programs reaching their highest attendance to date, increased participation by our CAE members, and the successful launch of our first premier 3 day Fall Conference. Therefore this new tradition continues as we kick off an exciting 2016/2017 new program year next month with our 2nd Annual Fall Conference focused on the Pursuit of Excellence to be held at the Sheraton Universal Hotel in Universal City, CA on Sunday, September 25th to Tuesday, September 27th, 2016. We invite you to attend what is becoming the marquee IIA event on the West Coast!

Our schedule of events will be composed of both general and concurrent sessions. For the general sessions, we have 4 dynamic key note speakers and an amazing slate of speakers covering our concurrent sessions within the IIA’s newly established Centers of Excellence, Governance, Risk, and Compliance, Fraud and Technology & Security. This event will provide you and your teams the opportunity to gain up to 24 hours of CPE and will include a welcome breakfast, luncheon, and networking reception.

The Sheraton Universal Hotel is providing a spacious and elegant exhibitor area positioned with access to the attendees as we transition between the Conference sessions. Sponsors will receive direct exposure to members of one of the largest IIA Chapters in the country – consisting of 800+ internal auditors from over 250 organizations. Check out our website and register at: https://chapters.theiia.org/los-angeles. A group discount of 5% is available to groups of 5 or more and a group discount of 10% for groups of 10 or more. See you next month!

Inside This Issue President’s Message Hot Links Invitation to 2nd Annual Fall

Conference Welcome to Our New

Members Join the IIA LA Chapter Certifications - Newly

Minted CIAs and CRMAs Volunteer Opportunities CIA Application Fee Waiver Notes From The IIA’s 75th

Int’l Conference Help Wanted! From IIA

Guidance Committee

Hot Links

www.theiia.org IIA-LA Chapter Homepage IIA Certification IIA Bookstore IIA Standards and Guidance IIA-LA Chapter Job Postings Audit Channel TV

JOIN OUR GROUP ON

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Cindya Williams IIA LA Chapter President

Volume 73, Issue 1

August 2016

8 Reasons to Attend The 2016 Los Angeles Chapter Two Days Fall Conference

• Network with your peers, while sharing and discussing cutting edge ideas and concepts • Earn up to 16 CPEs in our Center of Excellence, GRC, Fraud and Technology/Security tracks • Learn more about how to leverage technology • Learn more about Fraud Risk, Detection and Prevention • Gain valuable internal audit tools • Learn more about Governance, Risk and Compliance • Come early and enjoy Universal Studios Hollywood which in steps from our conference site • Win an iPad mini (one lucky attendee will; must register for the full conference and be

present at the social event to be eligible)

NOTE: A group discount of 5% is available to groups of 5 or more and a group discount of 10% for groups of 10 or more cannot be combined with the early registration discount. Group checks will also be accepted as long as the group registration meets the criteria and registration and payment are confirmed by the early bird deadline of August 25th. Please contact the Executive Committee at President@theiia-la.org for more information.

Click Here for more information including the Event Summary, Schedule, Keynote Speakers, and Fees

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John Chuong Tara Curry

Megan Noa Tala Haddad Keith Rivers

Join the IIA Los Angeles Chapter

If you would like to join The IIA, please click here, and then, click on "join or renew" and complete the application. Enter "Los Angeles" in the optional field that says chapter affiliation. Also, if you have recently changed jobs or moved, you can update your IIA profile and use this link to make any name, address or other data change to your information.

Are you already a member of the IIA, but a different chapter? Or, don't know to which chapter you belong? In order to officially join the Los Angeles chapter, you must update your chapter affiliation. To update a chapter affiliation, call the IIA HQ at (407) 937-1100.

Cecilia Rasbot Lauren Wynn Nikhil Honrao Ashley Craig

We would like to welcome the newest members of the LA Chapter!

Kiran Tina Nicole Hill

Jorge Marquez Vicente Santos

Volume 73, Issue 1

August 2016

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Save in August! Certified Internal Auditor (CIA): Strengthen Your Core

For a limited time, Aug. 1‒31, 2016, The IIA is waiving the application fee (up to a US$200 value) for the Certified Internal Auditor® (CIA®) designation. Candidates must submit their application via CCMS during the waiver period to save! Offer ends Aug. 31, 2016.

As The IIA’s premier designation for more than 40 years, the CIA sets the standard for excellence within the profession. If you are looking to grow professionally, earning the CIA is an important step toward demonstrating your core internal audit skills and knowledge.

Certified Internal Auditor (CIA): Strengthen Your Core

Amin Berrah, CIA Raymond Chiu, CIA

Kara Goslin, CIA Michael Maimoni, CIA

Sarko Nalband, CIA James Abisror, CRMA

Please join us in congratulating these newly Certified CIAs and CRMAs:

Volume 73, Issue 1

August 2016

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Click here for Program Overview and Course

Schedule!

The IIA’s 75th International Conference: Notes from Doug Hileman Doug attended the IIA’s International Conference in New York in July, to help celebrate the IIA’s 75th anniversary. A reported 2,800 people attended – a record, and exceeding their expectations of ~2,400. Here are some highlights from some of the sessions I attended. If you’d like more information, there are more detailed write-ups of some at www.douglashileman.com, or you can use that website to contact me. just released a book (available through Research Foundation); I purchased the book, and am amenable to lending. There was a related presentation on Quality Assurance Reviews. However, I found this presentation lacking. The presenter described a case study where the initial state was so problematic that anything would be an improvement. I would liked to have heard a description of how the company justified the QAR, who did it (or how they were selected), how the results were communicated to Management and the Board, or how they overcame impediments to implement recommendations. Executive Fraud Triangle, Steve Giles: The presenter offered a variation on the familiar Cressey Fraud Triangle. Executives can be more prone to commit fraud with a combination of greed, pride, and entitlement. The author, based in UK, has published Managing Fraud Risk via Wiley Publishing. Finding the First Domino; Robert Mainardi: If you ever have the chance to hear Bob Mainardi – at a conference or on a webinar – go! Bob is gregarious, funny, and brilliant. This was an enlightened take on root cause analysis. In one of his trademark interactions at a meeting with Native Americans in Oklahoma, he asked the audience to describe root cause analysis. An audience member replied that it was “finding the first domino” – a great image. We hear about the “five whys” – but maybe there are three, or maybe there are twelve. Some of Bob’s tips: You cannot find root cause by yourself. Internal Audit can’t (and should try to) find root cause on everything. Have a discussion, not a meeting. Master the data; it will tell the full story. Third Party Relationships; Rick Shriner, RSM: Third Party Management (TPM) isn’t an activity, it’s a life cycle. Third parties include: brokers; distributors; agents; resellers; and other non-contracted parties. Each party poses different types of risk. Your TPM program shouldn’t be “one size fits all.” Integrated Reporting; Alexandra Chin, Global President, Association of Certified Chartered Accountants: This session offered little, other than to confirm my contention that Integrated Reporting (which you’ll see written as “<IR>”) has a long way to go. Alexandra’s point that “accountants have a role to play in creating relevant KPIs” is well taken. The IIA has given <IR> a fair amount of podium time (including keynote at the 74th International Conference in London). Richard Chambers is on their Board – a good move, for advocacy purposes. However, I see at least three fatal flaws with the model, and have not found a proponent to explain them to my satisfaction. Heartburn Caused by the Yellow Book; Leita Hart-Freita: Yellow Book, in my view, gets far too little space at conferences, so I was anxious to attend. This was a lively, interactive session. Leita’s career is focused on Yellow Book training and related services; and she’s written a book. Yellow Book goes well beyond the IIA’s IPPF. Yellow Book doesn’t allow bragging; you can’t mention it unless you did everything. There are prescriptive practices for fraud. Yellow Book auditors should report fraud, internal control weaknesses, non-compliance, and abuse. “Abuse” isn’t defined. The Integrity Office: Internal Audit and Compliance Under One Umbrella; Donald Sinko, Cleveland Clinic: Mr. Sinko described how the Cleveland Clinic came to realize that compliance, ethics, and Internal Audit would be most efficient and effective if they were in one group. Health care is distinctive in the number and complexity of laws, regulations, ethical standards, employee/ workplace make-up, and other factors. Cleveland Clinic conducts extensive research, and owns/ operates a mini-city just east of downtown. They have put an array of safeguards in place, and are routinely contacted by similar facilities to help make a similar transition.

Internal Audit Quality; Sally Anne Pitt: Sally Anne Pitt presented “10 tips” on Internal Audit Quality. She advocates using program logic to determine inputs that are required to deliver desired outputs and outcomes. She also supports Internal Audit creating a balanced score card to monitor and report on its performance. She has

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August 2016

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IIA Guidance Development Committee Fraud Risk Assessment at the Engagement Level: Help Wanted! By Douglas Hileman, CRMA, CPEA I am one of ten (10!) individuals on the IIA’s [global] Guidance Development Committee. The GDC writes the familiar Practice Guides and Practice Advisories. These will now be called “Supplemental Guidance.”

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August 2016

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I am leading an effort on Fraud Risk Assessment at the Engagement Level. My observation is that there are many presentations on fraud that describe it after it has been detected, the perpetrator identified, and the damages tallied. This is like watching a full episode of CSI. Internal Audit doesn’t live in this world; we live in the first 10 minutes of the episode. There is too little guidance about how Internal Audit should conduct fraud brainstorming sessions, what tests they should run, how to conduct interviews, and how this should be reported (especially if – as we all hope – fraud isn’t detected). The IIA is trying a model for the GDC where professional writers at the IIA will reach out to an extended group of contributors. I posted a notice in our Linked In group on how to register for this extended group. If you would like to suggest focus areas, offer insights, or be interviewed for this topic, contact Doug Hileman at doug@douglashileman.com for the best way to connect to the IIA.

It’s a popular member benefit: The IIA’s monthly Members-only Webinars. In August, enjoy two learning/earning opportunities. Review the schedule and sign-up early. Spaces fill fast and registration closes 24 hours prior to the beginning of the webinar. Register for two free August webinars now!

Call For Volunteers

The IIA Los Angeles Chapter is seeking enthusiastic volunteers who are committed to make a difference and advancing the profession. Volunteering is the perfect opportunity to interface with a vast diversity of internal audit professionals. Members, students, and individuals interested are encouraged to contact volunteers coordinators at: VP-membership@theiia-la.org

"The world is hugged by the faithful arms of volunteers." - Terri Guillemets

Learn and Earn: IIA Members-only Webinars