PAINTING THE FULL PICTURE
INTEGRATING THE DIFFERENT ROLE PLAYERS
INTERNAL AUDIT RETREAT
OUR APPROACH TODAY!!!
Defining combined assurance
Classes of assurance providers
Key objectives of a combined assurance framework
Effectiveness on current assurance
Designing a model
Achieving the Goal
Strengths to build on
What can we improve upon?
Linking Assurance to performance
Combined assurance per the standard...
King III defines Combined assurance as follows:
Integrating and aligning assurance processes in a organisation to maximise risk and
governance oversight and control efficiencies, and optimise overall assurance to
the audit and risk committee, considering the company’s risk appetite.
Role of the audit committee:
The audit committee should ensure that a combined assurance model is applied to
provide a coordinated approach to all assurance activities
The audit committee should ensure that the combined assurance is received is
appropriate to address all the significant risks facing the company.
The relationship between the external assurance providers and the company
should be monitored by the audit committee.
Role of Internal Audit:
King recommends that Internal audit should form an integral part of the combined
assurance model as internal assurance provider.
CLASSES OF ASSURANCE PROVIDERS
Those who report to management
Management functions, Over sight Committee
Preventative and Detective Control
Control Self Assessments
Enterprise risk Management
Heath and Safety
Legal and Compliance
WHAT IS COMBINED ASSURANCE?
Integrating assurance processes in a company to:
maximise risk and governance oversight and control
optimise overall assurance
to the audit and risk
considering the organisation's
KEY OBJECTIVES OF THE FRAMEWORK
Optimise Assurance Coverage
Coordinating the efforts of
management, internal and
external assurance providers
Systematic assessment of Key
risks associated with strategic
Extent to which risks have been fully
identified and responded to based
on an organisation or Departments
Support the audit committee in
assessing the effectiveness of
internal financial control
Assurance to the executive
authority or board in making their
statements on internal control in
the integrated report.
Provide context of the impact of
inadequate and ineffective control
Quantitative and qualitative impact of
control breakdown on the overall
EFFECTIVENESS OF ASSURANCE
DESIGNING A MODEL
Who is the risk champion?
Who in this scenario can present to top management?
National Treasury Model
QUESTIONS TO PONDER?
Develop a combined assurance framework
Align the existing governance model to leading practice
Assess the effectiveness of the risk management framework and processes and enhance risk
governance, infrastructure and ownership (risk governance, risk framework and methodologies, risk
appetite and tolerance, risk assessments, risk mitigation and control remediation)
Assess the overall effectiveness of assurance providers including External audit, Internal Audit
Regulatory compliance, and Risk management
position, people, processes, and performance)
Identify key risks across the business
Integrating and aligning the Internal controls framework in an organisation
Assess the design, implementation and effectiveness of entity level controls
Document processes and assess the design and implementation of key controls
Test the effectiveness of key controls
Develop the overall assurance and related materiality framework and approach for Internal Audit in
supporting it’s overall level of assurance to the Audit Committee
Support Internal Audit in assessing the level of assurance in its written assessment to the Audit
STRENGTHS TO BUILD ON
A combined assurance approach is mostly already in place
to an extent
which is a good starting point. The approach typically requires some further
tweaking and embedding into the day to day business activities.
A three lines of defence assurance model is typically already established,
where the first, second and third line assurance providers are already
involved in the business with their roles being fairly mature (except perhaps
for the management self
An ERM framework is mostly already in place. This integrates the business
objectives with business processes and key risks.
A Financial control framework and IT governance is often already in place,
however not tied into the ERM and expanded to also cover non
controls, and not necessarily integrated
WHAT CAN WE IMPROVE UPON?
transparency in terms of overall (combined) assurance results (data
information for decision making)
The combined assurance scope mainly covering financial risks,
should cover all
Structuring of the combined assurance team,
Overall combined assurance
framework not always in place or not integrated.
Management Self Assessments (MSA’s) not always in place
this may be an efficient
way of bedding accountability down and establishing a stronger risk / control culture.
LINKING ASSURANCE TO PERFORMANCE
Golden thread between strategy, risks,
What are the risks to and of the strategy?
How do we control/manage those risks?
Effective risk management = a better chance of
Achieving Objectives (EEE) = Performance
is only 1 measure of success.
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