Qualified Internal auditors an important key to the anti-corruption effort

Nov 04, 2018 Letters

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Dear Editor,

The Finance Director of Guyana Water Inc., Mr. Jaigopaul Ram, recently passed the certified internal auditor (CIA) designation – the flagship designation and world recognized certification in internal auditing administered by the Global Institute of Internal Auditors (IIA) – the voice of the profession. This is a huge accomplishment indeed although just a handful of eight other candidates wrote the programme. But it is a good sign that the programme is gaining ground with about fifteen certified internal auditors in the country. The CIA and other certification programmes offered by the IIA started in Guyana when I established the IIA Guyana in January 2000. Mr. Lindsay Bascom, a former member of the internal audit department at the now controversial Guyana Elections Commission, was the first Guyanese to sit, study, and pass the entire examination in Guyana back in 2005.
The CIA exam tests a candidate’s knowledge of current internal auditing practices and understanding of internal audit issues, risks and remedies and comprises four parts. The designation is the only globally accepted certification for internal auditors and remains the standard by which individuals demonstrate their competency and professionalism in the internal auditing field. Candidates leave the programme enriched with educational experience, information, and business tools that can be applied immediately in any organisation or business environment.
A well-structured and equipped internal audit effort with ‘fit and proper’ internal auditors is a critical element in the governance structure of an entity, especially public sector agencies. Research has now proven that having an effective internal audit function with qualified personnel can be a key to preventing and detecting frauds, scandals, and failures, particularly in government departments. In 1991, South Africa , through the Public Entities Act mandated the establishment of an effective internal audit function in public agencies. A year later in 1992, Israel’s Knesset passed the Internal Audit Act , thus becoming the first country in the world with a comprehensive legal basis for internal auditing. In 1995, Sweden required that internal auditing at public organizations be performed in accordance with the IIA Standards and be carried out by qualified internal auditors. In the aftermath of the 2004 federal sponsorship scandal in Canada, there was a public outcry for politicians to find ways to govern with accountability. As a result, the Canadian Government established a committee (of which I was a member) to have an internal audit effort in every government agency. Since then, this investment in internal audit functions paid off with some handsome dividends. The Government of Guyana should take note and have an effective internal audit function or elements of it in all government agencies.
Having unqualified internal auditors performing audit engagements with no regard to leading practices, standards, and code of ethics is a recipe for disaster as can be seen with the internal audit effort at City Hall for instance. Similar to an under-resourced audit function, one that does not have the right qualification to properly carry out his/her duties will produce superficial findings and may completely miss fraud indicators or be unprepared to deal with emerging risks. Unfit and improperly qualified internal auditors also may limit the function’s ability to offer anything beyond basic assurance. In an ever more complex and dynamic business world, where stakeholders are increasingly turning to internal audit for advisory services, having inadequate skills or unqualified staff crushes any hope of internal audit becoming a trusted advisor and gaining respect.
An internal audit function with unqualified staff is one that does not have the respect of management and the board. These are functions that operate in name only and provide no value to the organization. In this instance, internal audit findings and recommendations are routinely dismissed.
The Certified Internal Auditor qualification continues to enhance the recognition of internal auditing while providing a valuable educational experience for all who undertake it. As internal auditing’s importance to strong corporate governance continues to expand, the relevance and applicability of a CIA designation will continue to prove valuable to all professionals. Certified internal auditors are gaining recognition in many forums including the courts where they are increasingly being called as expert witnesses in fraud and corruption cases. It is therefore important for internal auditors to become certified as it provides a solid foundation to identify risks, governance and controls that can uncover potential irregularities and fraud in organisations in addition to increasing workplace performance and efficiency. Ultimately, possessing the certified internal audit certification elevates not only the status of the internal auditor and adds value to the organization, but advances the profession as well.

Lal Balkaran
Scarborough, Ontario

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