- Establish a clear and distinct authority for internal audit
- Prepare and approve an internal audit charter
- Adopt international audit standards, conduct a gap analysis, and prepare an action plan to work toward conformity with these standards
- Encourage staff to pursue professional accounting and auditing certifications
- Begin regular risk assessment as the basis for annual audit plans
- Work with management and audit committees to obtain timely responses to audit recommendations
- Establish audit committees with an approved charter
The ‘Three Lines of Defense’ Model was introduced at the 2016 workshop to help internal auditors establish to what extent their activities were: (i) genuinely related to internal audit (third line) work—that is, providing independent assurance to management and the audit committee on issues of governance, risk management, and control—compared to carrying out (ii) internal control activities (first line), or (iii) risk and compliance work for management (second line). A survey carried out during this workshop showed that, in practice, more than 90 percent of the auditors’ work was in the second or third categories, and thus not directly related to the internal audit function.
The focus of the workshops has recently shifted to the importance of applying the Institute of Internal Auditor’s International Professional Practices Framework (IPPF). Recent workshops have included sessions on these standards and their implementation. Internal audit units have been asked to consider their current level of conformity with the IPPF. With the support of CARTAC, three countries have completed a self-assessment, and prepared an action plan to bring their practices into line with these standards.
From the beginning, a popular aspect of the workshops has been presentations by the participants. A recent presentation on researching, acquiring, and implementing audit management software proved of great interest to participants who may have thought such software was beyond their means. Participants were surprised to learn of the wide range of software options, and several countries are committed to exploring these options over the next year.
Another popular feature of the workshops has been roundtable discussions of topics of common interest. This year, one roundtable focused on how to establish effective internal audit committees. The benefits of audit committees were highlighted, notably their positive influence on management’s implementation of audit recommendations. Several countries without audit committees expressed an interest in establishing them, while others made a commitment to approving and updating their audit committee charters.
A key output of the workshops is the preparation of action plans to further develop the countries’ internal audit capacity and effectiveness. At the beginning of the workshop, each country makes a presentation on its progress in implementing the previous year’s action plan, as well as a summary of its audit activities during the year. On the final day of the workshop, each country presents its action plan for the upcoming year. This year, there were 20 individual action plans in total. Based on identified needs and actions, countries will discuss their specific TA needs with CARTAC PFM advisors over the coming weeks, with a view to arranging capacity-building TA missions during 2017 and 2018.
[1] PFM Advisor, Caribbean Regional Technical Assistance Center (CARTAC).
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