Internal Auditor Focus On Good Governance or Fraud 1714420627

Internal
Auditor
“Do your best.
At least you tried”..
JLP
29 April 2024
“Do your best. At least you tried”..
A challenge and an opportunity
for the Internal Auditor?
Internal Auditor: Focus on

good governance or
fraud?
Vision: Increase confidence in governance,
among the various Stakeholders.
Mission: Provide the various Stakeholders

with independent and transparent audits of
how the company's management (Executive
Committee), uses resources and develops
strategies for efficient, economic and
effective governance.
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Internal Auditor: Focus on good governance or fraud?

“The pessimist complains about

the wind, the optimist hopes it
will change, and the wise man
arranges the sails.” John Maxwell, writer.
The role of Internal

Auditor
A proactive and modern
perspective? What do you expect from
the Internal Auditor? What does the Internal
Auditor expect from the Auditees? What
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competitive advantage? Who audits the
Internal Auditor?
Principles of good
governance
The principles of good governance (Corporate
Governance) of management responsibility are to:
1. Ensuring trust and integrity of information;

2. Ensure compliance with policies, plans,
procedures and legislation;
3. Ensure the safekeeping of assets;
4. Ensure economic and efficient use of
resources;
5. Ensure the achievement of the objectives and
targets set for the operations;
6. Add shareholder value;
7. Responsibility of management acts.
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Everything must supported by internal control
principles generally accepted. The
implementation of internal control principles is in
first place, the top management, and the process
developed by the administration, management
and staff, in order to provide reasonable
assurance that the organization's objectives are
achieved.
The main limitations of internal control,

contributing to the weaknesses of management
are mainly:
1. Disabled judgments assessment in decision-making;

2. Control breaks;
3. No execution control by "collision" between people;
4. Constraints in terms of resources;
5. Inefficient performance of internal or external audit;
6. Absence code of ethics and professional code of
conduct.
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7. Internal audit as a second level of control.
Another particularly important tool for deterring illicit

activities is the existence of the internal audit function,
which should be subject to a set of rules that are shared
and observed by their professional function, in order to
safeguard any conflicts of interests between them and
the organizations and the very performance of their
work.
The Internal Auditor should be a leader of ethical

behavior and thus to foster an environment that
contributes necessarily to the establishment of
adequate internal control procedures in order to be
achieved the goals set for the organization.
The internal audit team should play an

important role in changing behaviors
within the company should build
"bridges of dialogue" and not
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"separation walls" by the example
shown in carrying out actions through:
1. Compliance with Professional Standards for the
Professional Practice of Auditing;
2. Observance of the Code of Ethics;
3. Establishment of appropriate human relations,
respecting and knowing listen to the views of
others;
4. Audit report writing balanced view of the test
results, highlighting the positives, which should
include recommendations for improvement of the
control procedures and include, if possible the
opinion of the auditee;
5. Integrity and professional competence;
6. Loyal to the organization.
Organizations must implement high ethical standards,

not an exclusive optical fraud reduction but from the
perspective of resource management, so that they are
properly managed to be in private, public or state, a
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logic of creating shareholder value and customer value
(Stakeholders).
Ethical Values
The company must have a code of ethics, especially if
their operations and processes have an impact on
environmental quality, operations in non-democratic
countries, business with countries that exploit labor,
child labor, and ultimately if the company is listed on
the stock exchange.
The company should promote training in

ethics, since it is necessary to clarify
situations that for some employees are
clearly not evident or may think the
information they have access to is not
confidential or strategic for the company.
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Top management should be leader of ethical
behavior, for example the daily practice, preserving
the clarity of decisions and maintaining a high control
environment, particularly in terms of conflict of
interest, with particular relevance to the strategic
professional business functions.
Professional code of
conduct
The company is expected to adopt a professional code
of conduct, with special emphasis on professions /
strategic functions, whose independence the company
must maintain in order to not be called into question
the business strategies.
The code of conduct should involve all professionals

and should you approach, among others, the following:
1. General rules
2. Independence
3. Integrity and objectivity
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4. Accounting principles
5. Customer information confidentiality
6. Acts that discredit the profession
7. Advertising
8. Management bonuses
9. Commissions
10. Insider trading
11. Information management
Information is a resource that must be managed in

order to contribute to achieving the objectives of the
company, it is essential that there is a strategic plan I
training, properly articulated and consistent with the
mission and goals set for the company.
The strategic plan will

involve two components:
Processes and products related to the production
of a long-term vision;
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Systems and communications networks that are
attached to the strategic objectives.
The essential aspects of control in the field of

information systems through the following areas:
Access control architecture involves:

1. Physical security (cards with password,
security central);
2. Logical security (records in log files, backup's,
changes, deletions)
3. Access control plan (building access control
system, password assignment setting);
4. Information classification criteria;
5. Architecture management of information
protection (security administrator on the
controller);
6. Security architecture (prove the identity of
users, reducing the number of passwords to
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memorize, prevent external access to ensure
the confidentiality of critical information.
7. Recovery architecture;
8. Access management tools;
9. Conflict of interests.
Employees must, at the time of admission or in

the case of department transfer, signing a
specific document in order to safeguard

compliance with the code of ethics and conduct
and to ensure that should be clearly spelled out
possible conflicts of interest.
In these cases, the rules and the data model must be

clearly disclosed and created a commission resolution
of questions or clarifications.
This process should be periodically audited by internal

audit or external audit.
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Internal Auditor
Methodology
1. Assess the Risk Matrix/Processes/Risks; - COSO;
2. Performs Benchmarking;
3. Identifies good practices;
4. Identifies opportunities;
5. Identifies redundancies;
6. Stimulates Control Self Assessment;
7. Evaluates the Performance Indicators (Key

Performance Indicators, Key Control Indicators,
Key Risk Indicators);
8. Evaluates the designed processes/Identified Risks,

with the involvement of the “owner of each
process” (Owner Process);
9. Transforms into knowledge, making

recommendations;
10. Recommendations: Critical and Important;
11. Convince the Auditee/Customer to implement;

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12. Assesses effective implementation.
13. Scope: more effective risk management.
A new approach?
1. What?
2. When?
3. Where?
4. As?
5. Because?
6. Who?
7. Causes/Root Cause?
8. What impact?
9. What recommendation?
10. How effective?
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Strategic objectives
of Internal Audit:
1. Identify opportunities;
2. Carry out Benchmarking;
3. Identify good practices;
4. Identify redundant tasks;
5. Identify tasks to automate;
6. Assess processes and risks: risk matrix;
7. Identify the KPIs of the process to be
audited and evaluate the clearance
criteria;
8. Identification and measurement of the
root cause (determine what happened;
determine why it happened; determine
what to do to reduce the likelihood of it
happening again - risk mitigation);
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9. Evaluate the information system
(integrated and extensive or
fragmented?)
10. Evaluate the control of logical access
management.
11. Evaluate Social Networks.
12. Promote implementable
recommendations, on a cost-benefit
basis;
13. Promote follow-up: what difficulties
exist in implementing the
recommendation.
14. And, know how to answer the five
C's when writing the Findings:
 Criteria;
 Condition;
 Causes/root cause;
 Consequences / Impacts;
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 Correction.
And finally, encourage the corrective action

plan, inform management and carry out the
follow-up.
And, Low-Profile, Fair-Play

and Good-Luck (LPFPGL).
Joaquim Leite Pinheiro
29/04/2024
H L Mencken,
“To a complex problem there is an answer
that is clear, simple and wrong.”
|||| Henry Louis Mencken, also known as H. L. Mencken, was an
American journalist and social critic. ||||||
“Para um problema complexo há uma resposta que é

clara, simples e errada”. ||||Henry Louis Mencken, também
conhecido como H. L. Mencken, foi um jornalista e crítico social norte-
americano.||||
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“Do your best.

At least you tried.”
18 de 18

Internal Auditor Focus On Good Governance or Fraud 1714420627

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Internal

for the Internal Auditor?

Internal Auditor: Focus on

Mission: Provide the various Stakeholders

Internal Auditor: Focus on good governance or fraud?

“The pessimist complains about

The role of Internal

Internal Auditor: Focus on good governance or fraud?

1. Ensuring trust and integrity of information;

Internal Auditor: Focus on good governance or fraud?

The main limitations of internal control,

1. Disabled judgments assessment in decision-making;

Internal Auditor: Focus on good governance or fraud?

Another particularly important tool for deterring illicit

The Internal Auditor should be a leader of ethical

The internal audit team should play an

Internal Auditor: Focus on good governance or fraud?

Organizations must implement high ethical standards,

Internal Auditor: Focus on good governance or fraud?

The company should promote training in

Internal Auditor: Focus on good governance or fraud?

The code of conduct should involve all professionals

Internal Auditor: Focus on good governance or fraud?

Information is a resource that must be managed in

The strategic plan will

Internal Auditor: Focus on good governance or fraud?

The essential aspects of control in the field of

Access control architecture involves:

Internal Auditor: Focus on good governance or fraud?

Employees must, at the time of admission or in

specific document in order to safeguard

In these cases, the rules and the data model must be

This process should be periodically audited by internal

Internal Auditor: Focus on good governance or fraud?

3. Identifies good practices;

6. Stimulates Control Self Assessment;

7. Evaluates the Performance Indicators (Key

8. Evaluates the designed processes/Identified Risks,

9. Transforms into knowledge, making

10. Recommendations: Critical and Important;

11. Convince the Auditee/Customer to implement;

Internal Auditor: Focus on good governance or fraud?

13. Scope: more effective risk management.

Internal Auditor: Focus on good governance or fraud?

Internal Auditor: Focus on good governance or fraud?

Internal Auditor: Focus on good governance or fraud?

And finally, encourage the corrective action

And, Low-Profile, Fair-Play

“Para um problema complexo há uma resposta que é

Internal Auditor: Focus on good governance or fraud?

“Do your best.

Internal Auditor: Focus on good governance or fraud?

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