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THE IIA IN SPAIN. IMPLEMENTING AN EFFICIENT AND EFFECTIVE INTERNAL
AUDIT FUNCTIONMalta – October 26th , 2011
MFIAMalta Forum for Internal Auditors
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I. The IIA in Spain
II. Key factor for implementing an efficient and effective Internal Audit function
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I.The IIA in Spain
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2011…IIA SPAIN AT A GLANCE
Members:- 2.500 members- 185 corporate members
Integrated and aligned with IIA Global:- 9th Institute in the world- 5th Institute in Europe- One Spanish member on IIA Board
Founded in 1983
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OUR MEMBERS OUR CORE VALUE
Public Sector 5% Banking &
Financial Services 26%
Insurance 15%
Telecom 7%
Retail& Consumer 6%
Energy& Utilities 8%
Construction & Infraestructures 8%
Consultancy Services 8%
Pharmaceutical Quemicals 3%
Others 11%
Transports 11%
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Excellence Institute Management
Profession´s voice and reference
Continuous improvement of products
and services
Strengthening membership and profession
HOW WE WORK – OUR STRATEGIC PLAN
Service to members
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Our services
Know How
Know Who
CertificationsTechnical PublicationsWeb Site
SeminarsAnnual ConferenceChief Audit Executives MeetingsIndustries MeetingsBreakfast Meetings
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OUR SERVICES
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KNOW HOW
Certificacions to improve the profession:
- Certified Internal Auditor CIA 500 CIAs in Spain
- Quality assesment QA 40 IA departments in Spain
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PUBLICATIONS Pure Know How helps Know who. We use it to enhance networking among members through special meetings at which we introduce the new publications.
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OUR SERVICES
• One of our main missions, to improve professionalism
• Helps to share values• Helps members in their ethical
commitment of keeping updated.• More than 50 seminars of 5 to 37 hours
Meet the two expectations: know how & know who
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EventsMeet the two expectations:
know how & know who
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ADVOCACY EFFORTS• May 2006: Unified Code, issued by the Spanish Market
Regulator• Comply or explain• Existance of an internal audit function• Internal auditor defined as Top Management
• Since May 2009, IIA members participate actively in the TASK FORCE crreated by the Spanish Market Regulator for internal control over finantial reporting
• IIA Spain received by His Majesty the king of Spain Juan Carlos I
• IIA Spain to organize European Conference 2011
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II.Key factor for implementing an efficient and effective Internal Audit function
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(1) Non financial entities (car dealerships, retail chains, etc,)
SPAIN OTHER COUNTRIES TOTAL
NUMBER OF COUNTRIES
EMPLOYEES
MAPFRE NETWORK
BANK BRANCHES
DISTRIBUTION AGREEMENTS(1)
BROKERS
1 42 43
16,680
20,064 36,744
3,226 2,125 5,351
1,201 6,1244,923
819 1,057 1,876
22,326 47,649 69,975
INTERNATIONAL PRESENCE
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(1) Includes: Life technical reserves, mutual and pension funds(2) Includes minority interests
2010 2009
CONSOLIDATED REVENUES 20,470,8 18,830,4
FUNDS UNDER MANAGEMENT (1) 28,118,6 24,130,5
GROSS RESULT 1,431,0 1,446,2
NET RESULT 933,5 926,8
TOTAL EQUITY (2) 7,795,8 7,093,8
TOTAL ASSETS 48,672,3 43,105,8
S&P RATING AA AA
Million Euros
KEY FIGURES
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Million Euros
2,323
YEAR REVENUES ASSETS GROSS RESULT EMPLOYEES
1986 434 706 251989 1,214 1,989 49 3,8691992 2,419 3,769 37 5,5281995 3,249 6,879 203 11,2921998 4,546 9,669 178 15,2192001 8,933 19,276 316 16,7562004 10,756 31,482 847 19,9202007 14,866 37,627 1,366 30,6152010 20,471 48,672 1,431 36,744
HISTORIC EVOLUTION 1986-2010
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GOVERNANCE FRAMEWORK: structure
BOARD OF DIRECTORS
Executive Committee
Delegatecommittees
Highest-ranking management and supervisory body
Coordination and supervision of strategic, operational and business affairs of MAPFRE
AUDIT
APPOINTMENTS & REMUNERATION
COMPLIANCE
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SHAREHOLDER STRUCTUREFundación MAPFRE: 64.65%BFA (CAJA MADRID): 14.99%Free Float: 20.36%
ORGANIZATIONAL CHART
HOW DOES THE INTERNAL AUDIT FUNCTION ADD VALUE TO MAPFRE?
MAPFRE S.A.
DOMESTIC INSURANCE INTERNATIONAL INSURANCE GLOBAL BUSINESSES
MAPFREFAMILIAR
MAPFRE VIDA
MAPFREEMPRESAS
MAPFREAMÉRICA
MAPFRE INTERNACIONAL
MAPFRERE
MAPFREASISTENCIA
MAPFREGLOBAL RISKS
LEGAL DEPARTMENT INTERNAL AUDIT FINANCIAL AREA INVESTMENTS RESOURCES &
PROCUREMENT TECHNOLOGIES &
PROCEDURES
91.5%
100%
100%
88.9%
100%
100%
100%
100%
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Internal Audit Organizational Chart
MAPFRE FAMILIAR
IAU
INTERNATIONAL DIRECT
INSURANCE IAS
DIRECT INSURANCE
SPAIN IAS
Internal Audit Services
MAPFRE Internal Audit General Management
MAPFRE S.A. Board of Directors
CEO
Solvency II Deputy General Manager
MAPFRE Internal Audit Vice General Manager
IT Deputy General Manager
Audit Committee
MAPFRE EMPRESAS
IAU
MAPFRE VIDA IAU
MAPFRE ARGENTINA
IAU
IT IASGLOBAL BUSINESSES IAS
MAPFRE BRAZIL IAU
MAPFRE CHILE IAU
MAPFRE COLOMBIA
IAU
MAPFRE DOMINICAN
REPUBLIC IAU
MAPFRE AMERICA
CENTRAL IAU
MAPFRE MEXICO IAU
MAPFRE PERU IAU
MAPFRE PHILIPPINES
IAU
MAPFRE PORTUGAL
IAU
MAPFRE PUERTO RICO
IAU
MAPFRE TURKEY IAU
MAPFRE USA IAU
MAPFRE VENEZUELA
IAU
MAPFRE MALTA IAU
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INTERNAL AUDIT KEYS
2. Technology 3. Proximity to business1. Training
Total of 17,640 hours (average 2008-2010)
134 Hours a year per auditor (average 2008-2010)
The IAS’s and IAU’s are located in the Units
The IAU’s Managers abroad are NATIVE
Auditm@p
Auditm@p Report
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In addition to the formal aspects such as:
proper placement in the charthaving an Audit Charteretc…
there is a need for…
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INTERNAL AUDIT POLICIESIt is advisable that Internal Auditing defines policies that should be approved by the Board of Directors and the Audit Committee, where appropriate. These policies underscore its most important asset, i.e. its human resources. They shall be as follows:
• Selection.• Training.• Career Plan. • Remuneration.• Assessment.• Talent Retention.• Investment.
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SELECTION
• The requirements necessary to be an internal auditor must be stated in writing.
• Each organization must establish its own criteria.
• In MAPFRE
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SelectiongraduatesEnglish language proficiency, written and spokenfavorable report from the Psychology Department
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TRAINING
• In order to produce reliable on high quality internal audit reports, it is essential that the Internal Audit has a training policy in place:
• In MAPFRE
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Total of 17,640 hours (average 2008-2010)
134 Hours a year per auditor (average 2008-2010)
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CAREER PLAN
• Internal auditors shall be classified by categories.
• In order to have certainty in their careers the internal auditors must know which is the promotion criteria established by Internal Auditing.
• Internal Auditing might become a breeding ground for future directors of other areas within the organization.
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REMUNERATION
• Closely related to the career plan policy.
• The remuneration of auditors according to the category they belong to must be reported by writing.
• In order to implement this policy, the leadership skills of the CAE will be required to convince the organization of the sustainability and need thereof.
• Benchmarking research will be also convenient.
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ASSESSMENT
• The internal audit function evaluates:the activitiesproceduresprocessescontrolssystems of governance, etc…
but it must also be subject to assessment by the rest:the audit reportsthe internal auditorsthe Chief Audit Executive
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TALENT RETENTION
• Internal Auditing
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Area from which professionals are internally demanded to take on responsabilities in management areas
In order not to decapitalize Internal Auditing
A talent retention policy should be established to avoid imbalances whenever the internal auditors rotate
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INVESTMENT
• Investment policy in place in order to be at the forefront of TECHNOLOGY.
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THANK YOU