The Institute of Internal Auditors with Qatar University's Scientific Accounting Association held a very successful seminar sponsored by Doha Bank. The topic based on Guidance note on Monitoring Internal Control was presented by Dr. Sridhar Ramamoorti a key member of Grant Thornton authoring team who conducted the research and wrote the guidance. â€œQatar audience is fortunate that it is internationally the first time this guidance note is deliberated said Sundaresan Rajeswar, President of the IIA.
The objective of guidance is to provide practical ways for companies to improve the effectiveness of internal controls through the process of monitoring. Organizations should be concerned about atrophy risk or the risk that the unmonitored systems of internal controls will deteriorate over time. Entropy presages atrophy. Hence monitoring is critical Dr. Sri stated. The recent examples of corporate failures once again provided evidence of companies having underinvested in the internal controls. Good internal controls are pre requisite for effective monitoring to be undertaken he added.
Changes in people, process, technology warrant close monitoring and tracking that critical controls designed are functioning effectively said Dr. Sridhar who researched human psychological perspectives in the assessment of risk. Too many companies presume and live with a false sense of security about how well the risks are managed. The speaker drew attention to a quote from Mark Twin it ain't what you don't know that kills you. What kills you is what you think you know that ain't so
The second part of presentation focused the role of Internal Audit function in monitoring controls. Sridhar cautioned auditors with example of how a cop jumping traffic signal would be accepted by onlookers as exigency, similarly management override of controls gets nod from auditors. Auditors become victims of schizophrenia with two masters to serve in CEO and stakeholders
Monitoring is inextricably linked with governance and Enterprise risk management activities. As such involvement of Internal audit in monitoring represents valuable opportunity for the profession in raising its profile. Auditors should acquire specialized expertise, a mix of assurance and consulting engagements. These skill sets included consensus builder, tech savvy, globally savvy, conflict resolver etc
Answering to a question whether Internal Audit failed to act or predict the downfalls, Sridhar stated that â€œthe status and objectivity of internal audit function in some of these organizations appeared to be suspect or weak. It was less a question of competence. In a company Internal Auditor was forced to resign over his pointing out and in another critical issue was kept out of scope of audit
Sridhar concluded his presentation with his statement about future of Internal Auditing: The Boards are likely to look to Audit as ally in understanding the risk profile and how well management manages risks. The landscape of business is changing dramatically. Auditors should learn to work smarter by leveraging technology with talents, competence, skill sets and positioning themselves appropriately within the organizations they work
Girish Jain welcomed the audience and Assaad Kannan proposed vote of thanks. Sundaresan Rajeswar presided over the meeting. Book signing ceremony of autographing the books presenter authored was held after the event.