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There's never been a better time to be an internal auditor

by Tony Rasman | Mar 27, 2019

Panellists Elizabeth Johnstone, Chair of the ASX Corporate Governance Council, Australian Banking Association CEO Anna Bligh, and ASIC Commissioner John Price all agreed there’s never been a better time to be an internal auditor.

Over 500 delegates attended the SOPAC keynote 4 session Governance 2.0 – Post Royal Commission at the International Convention Centre in Sydney yesterday.

Facilitated by Australian Financial Review’s Tony Boyd, the panel agreed that the recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry, focused primarily on culture, governance and remuneration, and what could be done in the short and long term.

Panellists agreed internal audit would play a key role going forward, and that Boards will be specifically looking to them to comment on the culture of an organisation.

ASIC Commissioner John Price said internal auditors had a ‘gate-keeper’ role, and ASIC would support any move to create ‘best practice guidelines’ or industry codes that bolstered improved skill-sets and professionalism within the industry.

ASX CGC Chair Elizabeth Johnstone told the audience that she felt the internal audit profession had progressed from last year’s rallying cry at SOPAC in Melbourne for them to be ‘bold and brave’.

In response to a question from the floor on whether the Royal Commission had shown that the Three Lines of Defence model was broken?

Ms Johnstone responded saying that the Three Lines of Defence model was not broken but the implementation and execution of the model was flawed. Ms Bligh commented that the Three Lines of Defence model was not infallible.

Ms Johnstone also said internal auditors should have direct access to Audit and Risk Committees, but they needed to deliver good data, be articulate, and provide solutions to non-financial risks. In that way they can provide value, she said.

Mr Price agreed and said that the Institute of Internal Auditors in their submission to the Royal Commission had highlighted clear reporting lines, being given a greater voice, and assuring the function was well-resourced. These factors were fundamental to role of internal audit.

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