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President's Message November 2008
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With many of our members having digested (or perhaps suffered indigestion) significant market declines over the last two months, both personally as well as the corporations/government agencies we work for, and the pension plans/RRSPs we belong to, it is now a good time to reflect on how we got here. To that end, the 1st Canadian National Conference in Calgary provided excellent insights relative to these turbulent times. If you did not attend, you owe it to yourself to block September 20-23, 2009 in
your calendar for next year’s conference in Quebec City.
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One of the many highlights of the Calgary Conference was a speech delivered by Dr. Sridhar Ramamoorti, a partner in Grant Thornton LLP’s National Corporate Governance Group in Chicago and a former Chair of the IIA Global Academic Relations Committee. He was the keynote speaker on Tuesday Oct 7 who provided an interesting perspective on how psychology and sociology intersect with the “numbers.” With his CPA and CIA certificationsand a PhD in Psychology, his perspectives were fascinating on how a number of crises have hit our financial markets and how this is bound to continue in the future. Behavioural economics and finance is an emerging discipline used to understand individual and market psychology. With our business training, internal auditors have focused on “numerical literacy” and discounted behavioural science insights as “fluff stuff.” Yet it is behavioural science that is key to all these crises. In 1998, the SEC Chairman Arthur Levitt provided these prophetic comments: “Too many corporate managers, auditors and analysts are participants in a game of nods and winks…Managing may be giving way to manipulation; integrity may be losing out to illusion… how difficult it is to hold the line on good practices when the competitors operate in the gray area between legitimacy and outright fraud. A gray area where the accounting is being perverted; where managers are cutting corners; and, where earnings reports reflect the desires of management rather than the underlying financial performance of the company.”
Without an appreciation for the “behavioural science” metrics, scandals and other improprieties will continue. Internal Auditors have an important role to play in identifying issues before they become so significant.
This newsletter includes pictures of some of the attendees at the Calgary Conference, including yours truly enjoying a fresh glass of grape fruit juice.
Jimmy Barbour’s Programs Committee continues to scale new heights in delivering an excellent program. Announcements for future offerings (through February 2009) are in this newsletter.
The International standards for the Professional Practice of Internal Auditing will be published in the New Year. All Internal Audit departments need to get a copy to ensure they are up-to-date with the latest standards.
It was nice to see our own Lal Balkaran, a prolific writer, with an article in the October 2008 Issue of the Internal Auditor (“Two Sides of Auditing” page 21). Each time one of our members is published the chapter earns achievement points, so I would encourage all members to sharpen their pencils and write about what interests them and/or their area of expertise.
I would like to thank the Board and all the committees for their excellent efforts in growing the Toronto Chapter.
Hope to see you all at a future event.
Tony Stanco
President, IIA – Toronto Chapter
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