THE EFFECTIVENESS OF INTERNAL AUDIT PLANNING IN MALTESE COMPANIES: AN ASSESSMENT

1. THE EFFECTIVENESS OF INTERNAL AUDIT PLANNING IN MALTESE COMPANIES: AN ASSESSMENT DANICA TONNA SEPTEMBER 2015

2. AGENDA Introduction - Objectives of the study Data Collection & Participants Findings Part 1 – The Quality of the IAF & The Planning Process Part 2 – Performance Measurement & Evaluation of the IAF 4. Concluding Notes & Recommendations

3. INTRODUCTION • IAF - scrutinised to demonstrate that it can ADD VALUE

4. INTRODUCTION • IAF - scrutinised to demonstrate that it can ADD VALUE

5. INTRODUCTION • IAF - scrutinised to demonstrate that it can ADD VALUE

6. INTRODUCTION • IAF - scrutinised to demonstrate that it can ADD VALUE

7. INTRODUCTION • IAF - scrutinised to demonstrate that it can ADD VALUE Planning is the initial stage in the audit cycle

8. Audits follow a process – 4 main stages

9. OBJECTIVES OF THE STUDY To ascertain the extent to which the planning process is carried out in these organisations. To evaluate auditors’ assessment of the risks to be taken into account in long term planningand how such planning is aligned with the overall business strategy of the organisation. To determine whether audit activities are meeting their goals and objectives through the establishment of performance measures and whether these can be further enhanced.

10. DATA COLLECTION & PARTICIPANTS

11. DATA COLLECTION & PARTICIPANTS Multiple Research Design – Qualitative & Quantitative Methods used

12. FINDINGSTHE QUALITY OF THE IAF &THE PLANNING PROCESS

13. 50% 50% The Setting of the IAF within selected Maltese Organisations

14. 85.7% - users 82.6 % - IAF Extent of Agreement in relation to Sufficient Pre-Planning and Co-ordination by the Internal Auditors with the Departments

15. Weighting given to Planning

16. IAF Staff Complement

17. Recruitment of Special Specialists

18. Risk Assessment

19. FINDINGSPERFORMANCE MEASUREMENT &EVALUATION OF THE INTERNAL AUDIT FUNCTION

20. 31.8%

22. EFFECTIVENESS OF THE PLANNING PROCESS Do you think your planning process needs improvement?

23. CONCLUDING NOTES • OBJECTIVE 1 • Extent of the Planning Process • FINDINGS • IAFs are managed effectively • IIA Standards are tailored to the organisation’s needs • Planning stage is given the necessary attention • Concern – Lack of staff • Improvement – Time Element – Affects performance of the IAF • There is communication & feedback between the departments • Attention is given to risk – Risk Based Approach – Focus on high risk areas

24. OBJECTIVE 2 • Evaluation of Long Term risks when planning • FINDINGS • Strategic (LT) audit plans are not so popular - Not adequate to prepare strategic plans…with a visibility > year • Short Term plans are preferred – Changing circumstances – Audit plans are not fixed • Contradiction with the Risk Based approach – Organisation perceives future risks in the LT • RECOMMENDATIONS • A Risk Management Department to be set up in line with the setting up of an IAF

25. OBJECTIVE 3 • Establishment of Performance Measures • FINDINGS • Quality Assessment & Improvement Programmes mainly through reported issues, being ..supported by: • - Working Papers • - Customers’ Feedback • - Follow-up • Lack of Independent reviews – Imp for independence • Staff Evaluation – Mainly through CAE , Audit Management feedback & Self Assessments • RECOMMENDATIONS • The regulation of External Independent Reviews on the IAF • More utilisation of Performance Measures by the Maltese IAFs

26. Thank You