celebrating may internal 1 may-june 2016 audi wire … - may...internal auditing chapter leaders...

May-June 2016 Audi WIRE

Celebrating May Internal Audit

Awareness Month

very year in May, the internal audit profession is celebrated throughout the world in what is known to be

International Internal Audit Awareness Month. In the spirit of fostering awareness of what we do as internal auditors and how we add value to our entities in contributing to

organizational governance, internal control processes and risk management, marketing strategies are employed in advocating our profession. Whether through hosting a series of sensitization sessions and competitions or publishing articles on the company’s website, we as internal auditors, play an integral role in educating and promoting the profession to non-audit professionals and other stakeholders alike. This year, the IIA Trinidad & Tobago (IIATT) Chapter participated in its very first of many, Internal Audit Awareness Walk at the Nelson Mandela Park Grounds on May 21st 2016. Auditors from organisations

across the country came out in their numbers and actively contributed in what turned out to be a successful, team-bonding and ‘health-appetizing’ event. The Walk, which took less than an hour, was also a much-welcomed opportunity to give back to charity. Children from the St. Dominic’s Children Home were part of our celebration and were more than delighted with the treats that we had to offer. Special thanks to all those who contributed towards making our event a successful one - our primary sponsor First Citizens Bank whose contributions facilitated the purchase of our beautiful T-shirts, Mr. Derek Ashby who ensured that our bodies were physically prepared for the exercise, and to members of St. John’s Ambulance who were eager to provide ready assistance for anyone in need of First Aid; thankfully, there were no injuries. Without them, the transition of an idea shared to making the event a reality, would not have been a seamless one. Thank you! We look forward to seeing you next year, as we eagerly await the Internal Audit Awareness Walk.

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Newsletter

CELEBRATING MAY INTERNAL 1 AUDIT AWARENESS MONTH

TOXIC LEADERS, TOXIC CULTURES 2 ONE-DAY SEMINAR – “CORRUPTION 4 & THE HUMAN FACTOR” CARIBBEAN DISTRICT WORKSHOP 4 CAE CORNER 6 CERTIFICATION CORNER 7 UPCOMING EVENTS 8

Audi Wire

MAY-JUNE 2016


Toxic Leaders, Toxic Culture

Internal auditors can identify unhealthy behaviors that may undermine the organization.

eaders whose negative practices sustain an unhealthy, even toxic, culture in their organization foment distrust, behave unethically, disempower employees,

play favorites, and put their own needs and objectives first.

Culture affects organizational success. Knowing more about how a toxic leader can negatively affect an organization, can aid internal auditors in better understanding the entity’s internal control environment and therefore, take a more prominent role in suggesting effective mitigation tactics.

Spotting the Bad Leader

The Closed-Minded - At a roundtable of internal audit experts, The IIA identified leadership traits that strongly correlated with an unhealthy organizational culture. For example, secretive leaders keep information to themselves because of the power it represents in other words they “perceive information as currency in the workplace.” Closed-minded leaders do not like to be challenged.

The Autocrats - Autocratic leaders tend to be driven by power and are often high-producers. They can be more focused on their own greatness than on the organization’s success and future performance. Though they are not necessarily bad leaders, they sometimes tend to cross the line when they begin to believe they are above the rules and not to be questioned.

Intimidators - Intimidators take such self-centered behavior even further by exercising power through fear. They seldom compliment or reward success thereby undermining morale.

Manipulators – These types of leaders seek to maintain the illusion of power by using the latest buzzwords, cozying up to executive management, and constantly seeking the next big thing while ignoring their primary responsibilities.

Deflectors - Deflectors seek to control their own reputation by sidestepping accountability for a failure or responsibility for fixing it.

Inappropriately focused leaders – They try to achieve and retain control by orchestrating results they consider important, to the detriment of the priorities of others. They would often not explain what they wanted, but expected others to complete a task without direction.

Auditing for Poor Leadership

Internal auditors must leverage their experience to flush out the toxic leadership styles that tend to do damage when they go unchecked. Here are some techniques to assess the resultant internal control environment based on poor leadership.

Subjective Methods – Evaluate the degree to which traits of ethical leadership are present and how these individuals are perceived by peers and subordinates. Non-traditional auditing methods can be applied for example, using behavioral psychology to tailor communication styles to the audience.

Internal auditors may uncover some valuable indicators of dishonesty and cover-up by asking about past failures and

listening carefully and skeptically to the answers. An inability to provide specific details about past projects, a hesitancy to describe exact processes and, a reluctance to identify collaborators, may be warning signs that the individual’s successful track record is not all it appears.

Objective Methods: Some tried-and-true objective approaches can be quite effective. For example, these toxic leadership types tend to cause employees to flee the company. Therefore, it is worth looking at turnover rates and exit interviews, which will reveal the number of employees who have left and the reasons why. Employee engagement surveys may provide

advance notice of problems by revealing the leaders that employees are grumbling about and why.

Other potential evidence to reveal toxic leaders includes a history of litigation and regulatory issues, and a tendency to employ relatives, especially if they are not qualified for the positions they hold. Excessive travel or use of organizational resources for personal use might also be a red flag.

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Beyond the Questions

The work internal auditors do in gathering evidence is necessary and valuable but the real benefit to the organization is in the work they do to help prevent the recurrence of counterproductive behaviors or contain their damage.

Autocratic leaders may exercise control because they believe they are operating in out-of-control conditions. However, effective segregation of duties must exist in order to provide adequate checks and balances to mitigate against inappropriate concentration of control.

Inappropriately focused leaders may respond well to a demonstration of the benefits to the organization of rebalancing their priorities. For these leaders to understand the problem, coach them through a solution by using as much facts and experience as possible.

These recommendations may be appropriate within the scope of a normal audit if leader’s behavior is disruptive, but not destructive as to bypass controls. The internal auditor should discuss the recommendations with the CAE to ensure they are constructive, not confrontational.

However, if the leader’s behavior crosses certain boundaries and is so egregious, it must be reported through appropriate channels. If the leader is at a senior level, the CAE should report the concerns to the Board or the Audit Committee. If the leader is a middle manager, then the Senior Vice President or Vice President is advised. If the leader’s actions are beyond poor behavior and instead constitute a known violation of policy, such as fraud, then it is recommended that internal auditors follow approved investigation guidelines and create detailed documentation to keep the focus on the issues as opposed to the emotions and personalities involved.

It is advisable to involve the ethics, compliance, legal, and human resources functions in these instances.

Learning the Lesson

There are lessons to be learned from interaction with toxic leaders, unwelcome though that interaction may be. Engaging with challenging leaders is an opportunity for internal auditors to polish their skills in asking open-ended questions and listening to both what people say and how they say it.

It also is an opportunity to recognize that things are not always what they may initially seem to be. Most people exhibit some of these undesirable behaviors from time to time without belonging to one of the “unhealthy leader” categories. Internal auditors always have to investigate further and take a bigger-picture view. Everyone has an occasional off day, but observing his/her pattern of behavior can provide a more reliable assessment of the type of leadership style they exemplify and the internal control environment they create as a result.

Ultimately, despite all best efforts to follow standards, establish quality controls, and apply good practices, some leaders will be toxic. Internal auditors must remain vigilant in spotting them and taking appropriate steps to help identify the situation so it can be addressed through established processes in a timely manner.

Summary extract of article written by Jane Seago - May 31, 2016


One-Day seminar titled:

“Corruption & the Human Factor”

In commemoration of the Caribbean District Workshop held in Trinidad from June 2nd, 2016, the IIATT capitalized on the opportunity of having Dr. Juan Lorenzo Martinez Colon–District Representative here in Trinidad. Juan was generous enough to facilitate a seminar entitled “Corruption and the Human Factor” on June 2, 2016. The workshop covered topics such as Corruption Schemes, Kickbacks, Bribery, Conflict of Interest and the Impact on Controls just to name a few. Participants were very satisfied with the course and with Juan’s presentation style and ability to use live and current examples.

Caribbean District Workshop

2016

The Institute of Internal Auditors Annual Caribbean District Workshop was held from June 3rd – 4th, 2016 at the Trinidad Hilton Conference Centre, St. Ann’s for Regional Chapter Leaders.

The theme of this year’s workshop “People, Purpose & Passion: A Pathway to Success” was fitting, as Internal Auditing Chapter Leaders from five Caribbean Islands were brought together to not only discuss, but find resolutions and innovative ways to advocate for the profession.

This year was the first where chapter leaders logged in via go to meeting to be part of the District Workshop. The keynote address was delivered by the Institute of Internal Auditors North America, Caribbean District Advisor, Ms Raven Catlin, who gave a regional perspective in keeping with the theme of the workshop and reminded that passion and purpose were key factors for both professional success. The Institute of IIA Chapter Relations Manager, Ms Donna Wiley, brought greetings from IIA North America and reminded Chapter Leaders of the much anticipated 75th IIA Anniversary celebration which will be incorporated in the upcoming IIA International Conference in New York during the period “Celebrating Our Past, Inspiring Our Future”.

The Host Chapter President, Mrs. Camille Cumberbatch-Dhoray, in her welcoming address urged Chapter Leaders present to become leaders, to who follow their passion, lead with purpose, build great teams, and strive for continued excellence.

Feature Speaker – The Honourable Stuart Young Ministry in the Office of the Attorney General

and Legal Affairs

Facilitator, Dr. Juan Lorenzo Martinez Colon addressing the participants at the one-day seminar.

May-June 2016 Audi WIRE Among the eminent guests at this year’s District Workshop was the Honourable Stuart Young, Minister in the Ministry of Legal Affairs, Trinidad and Tobago, who also delivered the feature address. In Mr Young’s address, he reiterated that the role of the Internal Auditors was pivotal in getting Trinidad and Tobago back on course, since he believed that the culture and way in which business is done in this country needs to change.

The workshop was facilitated by District Advisor, Ms. Raven Catlin as well as District Representatives, Larry Kowlessar and Juan Lorenzo Martinez, (Caribbean East and West Respectively). Topics that were deemed not only pertinent, but timely, considering the current challenges faced by Chapter Leaders were as follows:

Chapter succession Planning Chapter Governance Bylaws Board structure Chapter Finances CAP Chapter Challenges & Risks Chapter Improvements

The IIATT wishes to extend heartfelt thanks to the generous sponsors of the event:

Platinum – ACCA, Gold – MC Systems, Bronze – PWC.

Special thanks to contributors Atlantic, Unit Trust Corporation and Grant Tortan, Associated Brands and Massy Stores for making this year’s session a rewarding and memorable one.

The Closing Remarks were delivered by Mr. Larry Kowlessar, who announced that the IIA Caribbean District Workshop 2017 will be hosted by the Jamaica Chapter. This was followed a photography session and city tour, sponsored by the Institute of Internal Auditors: Trinidad and Tobago Chapter. In closing the workshop,

(Back Row): Natasha Elias-Wilson (Chairman, Governors); Noel Inniss (Deputy Chairman, Governors); Camille Cumberbatch-

Dhoray (President); (Front Row): Precious Bissessar (Senior Vice President);

Florence Lee-Bhagwandass (Governor)

From left to right: Donna Wiley – IIA Global; Precious Bissessar – Senior Vice President, IIATT; Camille Cumberbatch-Dhoray – President, IIATT

In attendance at the Caribbean District Workshop 2016 are members from the IIA-T & T Chapter; IIA Gobal; and the

Caribbean East and West Contingents

Left to right: Chenelle Delpesh – VP, Professional Services and Penelope Williams - Governor


Pictures from the District Workshop, Dinner, Cocktail & Tour


CAE Corner

A moment with Ms. Bernadine Sammy-Fuentes Head of Group Internal Audit – Ansa McAl Ltd.

1. How long have you been in the Internal Audit profession? I entered the Internal Audit profession over ten years ago, but have spent some years in Finance roles since then. I have been in my current role for almost four years now. 2. What is the best advice you were given in your career? I was reminded by one of my Mentors that touchpoints become more important as I progress in my career. It was a conversation we had as I had been struggling with a feeling that more of my time was being spent coaching and mentoring as opposed to executing work. This was a change that came with my progression to a senior role, the importance of which I did not appreciate at the time. That advice has stayed with me and I owe much of my success to it. I know that I am only as strong and effective as my team, and that I work through them. Without their solid commitment and support, much of what we do would not be possible. 3. In your opinion, what are the top three (3) attributes of a CAE? 1) A CAE must have the highest professional and personal standards, unquestioned integrity and business ethics. 2) He/She must have the ability to think strategically and innovatively, lead and inspire high performance teams, and effectively communicate to all levels of the organization, to regulators and other stakeholders. This includes the ability to influence persons who do not report to the role. 3) A CAE must have in depth knowledge of, and experience in, the subject matter being audited. Along with this, he/she should be highly organized, intuitive and a collaborative problem-solver who is able to respond and adapt in the context of a dynamic environment.

4. What was one of your most rewarding/fulfilling moments as a CAE/in your career? The CEO of one of my previous employers told me at my farewell event (I had been the Company's CFO), that I had given the Finance function a voice. Although during my tenure with the Company I did not recognize this, it was heartening to learn that the long days and nights had not gone in vain. 5. Why do you consider good governance to be of high importance? Good governance is at the core of everything we do in the Organization. Although it is normally associated with the Finance area, many people do not realize that there is governance in all areas of operations from the rules of driving a forklift, to compliance with IFRS. In the end, success is dependent on the voracity of the process, and the process is safeguarded where sound governance exists. It is all connected. 6. How do you promote the profession at you company? Internal Audit at our Group is a critical function. I am lucky because the Leadership already recognizes this, and places reliance on my function in its decision making. It is of course, always desirable to be more visible, and I am constantly meeting with Senior members of the Leadership team on various projects to ensure they are reminded of the need to consider risk management and governance in any process design or procedure. This is sometimes tough given the size of our Group, however there is a genuine desire on the part of the Management teams to uphold the highest levels of governance within their various operations. In the end, I believe it is about building strong relationships with my Stakeholders, thereby ensuring they regard IA as a partner and consultant from whom guidance and support can be obtained, as we collectively strive to improve Governance levels across the Group. 7. What is the one (1) thing that people do not know about you? I am a published poet. 8. What is your favorite movie and why? Safe Haven - based on a novel by one of my favorite authors, Nicholas Sparks. It is a true love story which, despite the tragedy, has a happy ending.


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18 August 2016 - Half Day

3rd Chapter Meeting for 2016 Whistle Blowing – What’s your role?

19-23 September 2016

Anniversary Training Week 2016: “Building Competencies & Capabilities for Organizational Success” Lean Six Sigma Tools Internal Audit Planning (2 days)

Auditor-In-Charge – Tools & Techniques (4 days)

Computer Assisted Audit Techniques (2 days)

24 November 2016 - Half Day

4th Chapter Meeting for 2016 Compliance with State Enterprise Performance Monitoring Manual

December 2016 – TBA ANNUAL CHRISTMAS COCKTAIL


Professional Centre, Rooms B301/302 #11-13 Fitz Blackman Drive, Wrightson Road Ext.

Port of Spain, Trinidad

Phone: (868) 625-5558 Fax: (868) 623-4560 Mobile: (868) 769-1671

Email: [email protected] / [email protected]

Website: http://chapters.theiia.org/trinidad-and-tobago/Pages/default.aspx

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