Headlines to look for…

1. Headlines to look for… INTERNAL AUDITING - FRONT PAGE NEWS! “Internal Auditors again on the leading edge……” INTERNAL AUDITING - THE MOST SOUGHT- AFTER CAREER CHOICE! “University enrollment overflowing, the envy of the campus!” INTERNAL AUDITORS - THE NEWEST CELEBRITIES! “Those not fortunate enough to become internal auditors looking for opportunities to meet one” INTERNAL AUDITING - THE LATEST SENSATION! “Wow! Rarely does a profession contribute to society like….”

2. Internal Auditor named a “Person of the Year” “Last June, Cooper told the audit committee of WorldCom's board that the company had been playing dirty with its accounting practices.”Time Magazine

3. Advocacy 2006Promoting the Profession in Canada Brian G. Brown CIA, CMA, CFE Director – Corporate Services, Agricore United (Winnipeg) Canadian Representative on IIA Global Board of Directors and North American Board, Chair – Canadian Advocacy Task Force

4. Quotes: “Hidden Jewel in the organization” “Internal auditing is the primary agent of the audit committee within the company” “Internal audit is the primary resource of the audit committee in carrying out its duties and responsibilities” “One of the cornerstones of good governance”

5. Announcements: October, 2005 Canadian Government announces new Internal Audit Policy, entrenching IA in the governance structure. IIA gains presence on the SEC/PCAOB roundtable. “Internal audit is one of the hottest careers of the year”

6. References: “Corporate Governance – What Directors Need to Know” by Carol Hansell contains substantial discussion of the role of IA “Audit Committee Effectiveness – What Works Best” recognizes key role of internal audit

7. More Quotes: “Internal Auditing is a function formed by CFO’s to help them monitor accounting methods and compliance. It has no place in the governance structure” “We believe that it should be left to management’s discretion to determine its staffing needs…re (sic) the establishment, maintenance, and evaluation of…internal controls”

8. Announcements Canadian Securities Administrators 52-313 and proposed amended 52-109 continue to contain no reference to internal audit as a support for the Audit Committee. OSC Policy Forum and Dialogue Session (both 2005) contained no recognition of internal auditing. No provincial government initiatives to parallel Canadian federal government internal audit initiatives.

9. References…. Recent book for Audit Committees discusses “three pillars of governance” (Board, Management, External Auditors). Internal Audit is mentioned briefly in the section on Management’s role in Governance. Draft version of “20 Questions” did not reflect current practices in internal auditing.

10. And…in the academic world: No Canadian university offers an “Internal Audit” education program - generally, brief coverage under “other forms of audit” Primary and Secondary School programs contain no introduction to internal auditing

11. Also… Do each of our organizations recognize and value our profession? What about our friends and neighbours (ie the general public)? The media?

12. What do we do?

13. Long term vision for our profession… • Endorsed by governments & regulatory bodies • Consulted by outside organizations/commissions • Viewed as “a profession” • Recognized and respected in business/government • Valued by our organizations • Individual status and recognition

14. IIA Mission Statement (2005) The mission of The Institute of Internal Auditors is to provide dynamic leadership for the global profession of internal auditing.Activities in support of this mission will include but will not be limited to: • Advocating and promoting the value that internal audit professionals add to their organizations; • Providing comprehensive professional growth opportunities; standards and other professional practice guidance; and certification programs; • Researching, disseminating, and promoting to practitioners and stakeholders knowledge concerning internal auditing and its appropriate role in control, risk management, and governance; • Educating practitioners and other relevant audiences on best practices in internal auditing; and • Bringing together internal auditorsfrom all countries to share information and experiences.

15. Typical IIA Chapter Strategies: Priority Areas • Promotion of the profession • Services to our members • Quality education

16. Endorsement of profession Capacity development Membershipservices Canada Tier 1we influence them Regional Tier 2we work together Global Tier 3we share information Tier 4 IIA gives them information Tier 5IIA is aware they exist How - The Framework

17. Steps • Identify and prioritize targets • Determine objectives for each target • Develop plans (based on “tier”) • Identify “champions” • Develop messages • Monitor and report

18. Global Advocacy Efforts • Memorandum of agreement with ACCA • Founding member of COSO • Contributor to King Report in South Africa • Ongoing communication with SEC/PCAOB • IFAC & INTOSAI alliances • External Service Provider communications • Audit Committees/Boards of Directors • Junior Achievement • New Academic Relations Strategy • Numerous responses to exposure drafts and other proposed rules/guidance

19. Advocacy in CanadaMajor Change in Profile Establish the Canadian Council Hire a Canadian “Executive Director” Open an IIA Canada office

20. Advocacy in CanadaSignificant events in the last 18 months • Canadian Federal Government Internal Audit initiative • Securities Commissions (OSC, AMF, BCSC) – meetings, correspondence • The Directors College – IA on education program • Institute of Corporate Directors – National, Chapter relationships • CICA Audit Committee Conference (September 2005) • Certified Management Accountants (CMA) projects • Certified General Accountants (CGA) discussions • Several chapters initiate discussions with local universities • Speaker at CFO Summit (March 2006) • Meeting with Canadian leaders of ACCA, initiate chapter relationships

21. Tier 1: Ontario Securities Commission (OSC) Canadian Federal Government Institute of Corporate Directors (ICD) The Directors’ College Conference Board of Canada Tier 2: Provincial Governments Provincial Securities Commissions Institute of Chartered Accountants (CICA) Certified General Accountants (CGA) Certified Management Accountants (CMA) External Service Providers Canadian Public Accountability Board (CPAB) Canadian Comprehensive Auditing Foundation (CCAF) Advocacy in CanadaCurrent Priorities = Initial priorities

22. Common Messages Examples: • What is internal auditing? • Why should an organization have internal auditing? • What should be the reporting lines for the CAE? • What is the relationship between internal audit and the audit committee? • Why should an organization have an audit committee? • How do internal and external auditors differ?

23. Will this approach work? External Stakeholders & Others (Global/National) IIA & Other Advocates These activities will help but…..

24. …there are many others to influence….. Local Business, Academic & Government groups Local Chapters Chief Audit Executives “C” Class, Boards, AC’s, Peers Practitioners Peers, Public, Students

25. Every point of contact is an advocacy opportunity

26. How? • Relationship-building • Confidence, stature, style • Pride in our profession • Common messages and • Deliver on our Promises…..

27. Advocacy Risk Successful advocacy efforts are good news and bad news … Risk of expectation gaps increases with greater awareness, attention, and regulation by those outside the profession

28. Compliance with IIA Standards Certified, professional staff Top-notch communication skills Focus on risk management, internal control, governance Audit Committee and Management support Quality Assurance Reviews Fundamental to successful advocacy…. Provide outstanding internal auditing services every day….

29. Questions?Comments?