Unlocking value from internal audit

INTERNALAUDIT

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INTERNAL AUDIT

According to the Institute of Internal Auditors (IIA), an internal audit function can only achieve these outcomes if it carries out its work in conformance with the International Professional Practices Framework (IPPF). Achievement of all the mandatory components of the IPPF will enable an internal audit function to realise the Mission of Internal Audit – which is to enhance and protect organisational value by providing risk-based and objective assurance, advice and insight.

CONFORMANCE WITH IPPFInternal Audit Functions (IAF) is required to conform with the mandatory components of the International Professional Practices Framework (IPPF) of the Institute of Internal Auditors. Failure to conform may result in the IAF obtaining a “Does Not Comply” rating, which would mean that the IAF may not state anywhere in its documents that its work meets the mandatory requirements of the IPPF.

ADDING VALUE AND STAYING RELEVANT For the IAF to be regarded as relevant and not as just another avoidable cost, it must enhance and protect

organisational value in a visible and measurable way. Business must be able to demonstrate how the IAF adds value and show that value added by the IAF exceeds the cost incurred by the organisation. PROFESSIONAL INTERNAL AUDIT SKILLS In order to add measurable and undisputed value, members of the IAF should be proficient in the professional practice of internal auditing and possess the relevant industry knowledge. The IAF should also have access to specialized internal audit skills without having to incur excessive costs that may result from securing such skills elsewhere.

UNDERSTANDING YOUR CIRCUMSTANCE

The role of internal auditing within organisations is to assess and determine the extent to which the design of governance, risk management and internal controls structures and processes is logical, efficient and cost-effective. This means determining whether Governance Risk Compliance structures and processes are adequate, and whether the GRC structures and processes assessed as adequate are utilised effectively by the organisation to:

Generate, process and report reliable and redible financial and operational information;

Effectively, efficiently and economically achieve performance targets for operations and programmes;

Safeguard organisational assets; and

Comply with laws, regulations, policies, procedures and contracts.

Formulate and achieve sound strategic objectives;

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a. Internal Audit Assurance

The internal audit activities we perform may be classified as either post-factum, pro-active or real-time assurance or consulting services depending on the maturity, risk profile and actual assurance and consulting needs of an organisation.

i. Compliance Audits

The objective of compliance audits is to evaluate to what extent statutory requirements, by-laws, legislation, acts, laws, policies and procedures, statutory requirements, management and board decisions have been complied with ii. Risk-based Process Audits

The objective of these types of reviews is to evaluate the adequacy and effectiveness of controls in respect of key business processes and related risks

iii. Operational Audits

The objective of these reviews is to evaluate effectiveness and efficiency of operations

iv. Critical Financial Controls Financial discipline reviews focus mainly on the evaluation of the adequacy of financial controls for example control account reconciliations, segregation of duties and control over value documentation etc. in order to promote: o The safeguarding of assets; o The complete, accurate and timely recording of transactions; and o The prevention of fraud, errors and misstatement of financial information.

v. Strategy, Governance and Risk Management Audits

vi. Performance Auditing

The objective of performance audits/value-for-money reviews is to evaluate economy, efficiency and effectiveness within the entity. Internal Audit will identify a focus area of concern to Management, investigate it in depth and recommend actions to improve efficiency and effectiveness

vii. Pro-Active Assurance

Pro-active assurance involves real-time “Stop or Go” reviews and provision of immediate feedback by internal audit on whether a process, activity or phase/gateway has been performed in line with applicable legislation, corporate governance frameworks and approved policies, thereby enabling Management and/or the board to reach a decision in relation to that process, activity or phase/gateway

viii. Audit of Performance Information

The objective of the audit of predetermined objectives is to determine whether the reported performance against predetermined objectives is useful and reliable based on predetermined criteria

ix. Follow up Reviews

The objective of these reviews is to evaluate the progress made by Management with the implementation of previously agreed upon action plans regarding areas for improvement identified by the Internal Audit function in previously issued Internal Audit reports and reports issued by the external auditors

DETAILED OFFERINGS

SkX’s Internal Audit Value Optimisation (IAVO) services help unlock the value of your internal audit function; increases the influence your function has on your organisation’s strategies, stakeholders, operations and performance; enhances your function’s reputation as a Trusted Advisor; and earns you a seat at the strategy table. We achieve this through the following key service areas:

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We understand that extensive advisory engagements by your internal audit function may lead to impaired objectivity for the Chief Audit Executive and the internal audit team. To help CAEs address this dilemma, we perform all the internal audit advisory work on behalf of the internal audit function. This eliminates the threat of self-review.

Part of the advisory support work we perform on behalf of internal audit functions includes assisting internal audit functions with risk assessments and continuous risk monitoring – for organisations in which risk management structures and processes are not adequate.

Furthermore, we provide support with the performance of advisory engagements covering all the functions/departments within an organisation. The advisory support we offer to internal audit functions addresses the strategic, operational, compliance and reporting domains of the organisation. We achieve this through the following key service areas:Quality Assurance Reviews (ISPPIA 1311 and 1312)

We assist your organisation design and implement a robust Quality Assurance and Improvement Programme (QAIP) in line with the requirements of Standard 1300 of the Institute of Internal Auditors (IIA).

MATURITY ASSESSMENTS

We conduct maturity assessments on the internal audit function to assess the extent to which its structures and processes are aligned to the IPPF and practices applied by leading internal audit functions both locally and globally. Furthermore we assess the impact of the internal audit function’s work on the organisation’s strategy, operations and bottom-line. The outcome of our assessment results in the awarding of the maturity level rating. Our maturity assessments are quite rigorous and go beyond the “Generally Complies” rating that is awarded in the ISPPIA 1312 External Assessments.

TRUSTED ADVISOR SUPPORT

SkX’s Internal Audit Value Optimisation (IAVO) services help unlock the value of your internal audit function, increases the influence your function has on your organisation’s strategies, stakeholders, operations and performance; enhances your function’s reputation as a Trusted Advisor and earns you a seat at the strategy table.

Examples of consulting engagements we perform are as follows:

i. Process Improvements

ii. Integrated Reporting

iii. Control Self Assessments

iv. Governance and Risk Maturity Assessments

v. Internal Control and Compliance Frameworks

vi. Combined Assurance

b. Internal Audit Consulting

Consulting services generally involve two parties: (1) the person or group offering the advice – the internal auditor, and (2) the person or group seeking and receiving the advice – the engagement client. When performing consulting services, the internal auditor should maintain objectivity and not assume management responsibility.

Governance, Risk and Control (GRC) Capacity-BuildingSkX has a variety of programmes designed to enhance the skills of internal audit professionals and to take those who are already proficient to the next level of excellence. Our capacity-building and development programmes include:

Organisational GRC Support Programme This programme entails SkX providing training on governance, risk management and internal control processes to employees from across the different functions within an organisation. The objective of this programme is to enhance management’s knowledge of structures and processes of governance, risk and control in order to facilitate effective implementation of combined assurance within an organisation.

Internal Audit Technical Support ProgrammeThis involves the training of internal audit professionals to enhance their understanding of the International Professional Practices Framework (IPPF) and its practical application within an organisational set-up. The first phase of this programme covers training on the core components of the IPPF and other internal audit concepts and principles. The second phase is about practical internal audit simulations and the third phase involves on-the-job mentoring and coaching.

Our specific service offering includes:► Design of the quality assurance framework and implementation instruments; ► Performance of ongoing and periodic quality assurance reviews; ► Performance of external quality assurance readiness reviews; and ► Activities stated above are performed to help your internal audit function to conform with Standards 1311, 1312 and 1320 of the IIA. Achieving conformance with these Standards also ensures that you comply with Rule of Conduct 4.3 as outlined in the IIA Code of Ethics.

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SkX is one of South Africa’s leading empowered and transformed Audit, Risk and Advisory Firm. It is 100% black owned and managed with significant black women ownership.

Our commitment to transformation saw SkX transform itself through the recruitment of highly skilled black women to form part of the leadership team. This transformed our firm’s initial ownership to majority black women owned.

Our Business Solutions Practice specializes in providing solutions aimed at improving operational efficiency and enhancing revenue.

Our boutique of services equips us to be the ideal partner with the appropriate resources, knowledge and agility to effectively manage the future challenges and opportunities for all clients.

SkX has invested significantly in its people through the launching of our Internal Learning Academy as a learning platform for all our internal training interventions and a bursary programme in support of professionalisation.

SkX boasts a professional staff complement that services both the private and public sector with professional qualifications across the broad spectrum of our services.

SKX has been one of the very few successful Transformation stories in South Africa and a beacon of hope for Black Economic Empowerment. We represent a truly African firm reflecting the South African demographics in an industry that is dominated by international corporations.

WHY SkX

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SOME OF OUR CLIENTS

TRANSPORT, LOGISTICS AND AVIATIONTransnet, Passenger Rail Agency of South Africa (PRASA); and South African Airways (SAA)

FINANCIAL SERVICESHollard, Liberty, Alexander Forbes, Eskom Pension and Provident Fund, Government Employees Medical Scheme, Mvunonala, WDB Investments, Phembani Group, Public Investment Corporation, Harith General Partners, 3Sixty Life, Sizwe Medical Fund and Discovery

TELECOMMUNICATIONS & INFORMATION COMMUNICATIONS AND TECHNOLOGYTelkom, BCX, Sentech and Sita

MINING, RESOURCES & ENERGYEskom, Harmony, Exxaro and Foskor

MUNICIPALITIES Ethekwini Municipality, Umhlathuze Municipality and City of Tshwane

www.SkX.co.za

Head Office - GautengBuilding 1, 15 Forest RoadWaverley Office Park, BramleyTel: +27 (011) 797 6800

OUR PROFESSIONAL AFFILIATIONS

Kwazulu NatalSuite 1A, 100 Armstrong AvenueLa Lucia Ridge, Durban, 4051Tel: +27 (031) 562 1700

Product Lead

Tlamelo Ramantsi

Tel: +27 11 797 6800

Email: tramantsi@skxprotiviti.co.za

info@skxprotiviti.co.za

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Unlocking value from internal auditI n t e r n a l A u d i t

Accounting firm of the year 2017