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Creating, Managing & Evaluating the Internal Audit Function

Creating, Managing & Evaluating the Internal Audit Function. W. Samuel Capuano Manager of Internal Audit Sunmark FCU 518-347-3156 scapuano@sunmarkfcu.org. Overview. Creating the IA Function Managing the IA Function Evaluating the CAE. Enclosures. ACUIA Internal Audit Shop Tools

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Creating, Managing & Evaluating the Internal Audit Function

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  1. Creating, Managing & Evaluating the Internal Audit Function W. Samuel Capuano Manager of Internal Audit Sunmark FCU 518-347-3156 scapuano@sunmarkfcu.org

  2. Overview • Creating the IA Function • Managing the IA Function • Evaluating the CAE

  3. Enclosures • ACUIA Internal Audit Shop Tools • Audit Charter

  4. Creating the IA Function Does the CU need an IA Dept.? • NCUA SC Guide 6.01 • Large CU’s/complex operations • Benefits of IA to the CU • Making the argument

  5. Creating the IA Function Who to hire? • NCUA SC Guide 6.05 • Sharing? • “Qualified Individual” • From within? • Other FI Auditor • External Auditor/Examiner

  6. Creating the IA Function Candidate qualifications • NCUA SC Guide 6.05 • Academic credentials and/or technical training/proficiency • Commitment to CPE • Well developed communication skills • Independence

  7. Creating the IA Function CAE on the Org Chart • Independence Issue • NCUA AIRES Q#1 • Direct report to SC • Free from BOD & Mgmt. undue influence

  8. Creating the IA Function CAE on the Org Chart, cont’d • Functional report to SC • Dotted (administrative) line to? • Proper authority for CAE? • Under management’s thumb?

  9. Creating the IA Function Audit Charter • 1st order of business • Document independence • Document reporting structure • Full, free, unrestricted access (to everything!) • Confidentiality!

  10. Creating the IA Function

  11. Creating the IA Function Charter, cont’d • CEO notification • SC approval • BOD meeting • Both chairs’ signatures

  12. Creating the IA Function Audit Plan • CAE meetings with EMT • Materiality determination

  13. Creating the IA Function vvgg VS.

  14. Creating the IA Function Audit Program Sources • ACUIA Interactive Audit Guide • NCUA AIRES Checklists • Subscription Services

  15. Creating the IA Function Employee Relations • CU existed before • They may not like us • SC assistance

  16. Creating the IA Function

  17. Creating the IA Function

  18. Creating the IA Function First Audit! • Prior CAE communication of process • Audit Report format • Grading system

  19. Managing IA

  20. Managing IA SC performing IA tasks? • Duplication of efforts • Transition out • SC’s decision

  21. Managing IA SC Meetings • Frequency • (New?) Format • Who sets agenda

  22. Managing IA SC Monitoring • CAE Goals • SC – CAE ongoing communication • Open lines of communication

  23. Managing IA Reports to SC • IA Reports/Responses • System Reports • External Audits • Others?

  24. Managing IA RFP’s • External Financial Statement Audits • System Vulnerability Assessments • Other outsourced • IA research • SC approval

  25. Evaluating IA

  26. Evaluating IA CAE Performance Evaluation • Whose responsibility • Management input? • Goals establishment • NCUA/External Audit IA comments

  27. Evaluating IA Status Updates • Quarterly status of plan vs. actual • Action item status

  28. Evaluating IA Audit Plan • Annual presentation to SC • SC approval • 4th quarter materiality assessment

  29. Questions

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