IIA Dallas Super Conference October 28 - Stakeholder ... · Foundation – Why Stakeholder...
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Internal Audit Stakeholder Engagement Erin Morrow – Chief Auditor - Citi’s Global Consumer Bank Tony Akin – Audit Director – NA Cards
Transcript of IIA Dallas Super Conference October 28 - Stakeholder ... · Foundation – Why Stakeholder...
Internal Audit
Stakeholder Engagement
Erin Morrow – Chief Auditor - Citi’s Global Consumer Bank Tony Akin – Audit Director – NA Cards
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”2
Agenda
Topic Pages
Agenda 2
Foundation – Why Stakeholder Management is Key 3-6
Emotional Intelligence (EI) & Audit Phase Applicability 7-12
The Trusted Auditor and Trust Equation 13-16
Listening Challenge and Critical Audit Conversations 17-21
Q & A and Discussion 22
Thank You! 23
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”3
Foundation – Why Stakeholder Management is Key
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”4
Stakeholder Engagement – Delivering Our Mission
The three key principles/values that drive our mission and underpin everything we do are:Purpose: One global team, with one goal: provide independent assurance to our stakeholdersImpact: Act as change agents; provide independent insight that produces control enhancing
outcomesPeople: Foster an inclusive, ethical, diverse and collaborative environment which attracts, retains
and inspires people to be the best they can be.
Our mission is to provide independent, objective, reliable, valued and timely assurance to the Boards of Directors of Citigroup and Citibank, the Audit Committees, senior management and regulators over the effectiveness of culture, ethical conduct, governance, risk management, and controls that mitigate
current and evolving risks and in so doing enhance the control environment across Citigroup and Citibank.
Our Vision: Citi Internal Audit – expert, independent and trusted control enhancing assurance
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Core Principles
…for the Professional Practice of Internal Auditing
• Demonstrates integrity.
• Demonstrates competence and due professional care.• Is objective and free from undue influence (independent).• Aligns with the strategies, objectives, and risks of the organization.
• Is appropriately positioned and adequately resourced.
• Demonstrates quality and continuous improvement.
• Communicates effectively.
• Provides risk-based assurance.• Is insightful, proactive, and future-focused.
• Promotes organizational improvement
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Responding To A Challenging Day-to-Day Reality…
Ever PresentConflicting Demands
of a Professional
Source: © ARETAI CONSULTING LIMITED
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”7
Emotional Intelligence (EI) & Audit Phase Applicability
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”8
Emotional Intelligence (EQ) in Stakeholder Engagement
What is EQ and
How does fit in?
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”9
Emotional intelligence (EI) or emotional quotient (EQ) is the capability of individuals to recognize their own, and other people's emotions, to discriminate between different feelings and label them appropriately, to use emotional information to guide thinking and behavior, and to manage and/or adjust emotions to adapt environments or achieve one's goal(s).
Source: Wikipedia Coleman, Andrew (2008). A Dictionary of Psychology (3 ed.). Oxford University Press. ISBN 9780199534067
EI?
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Competencies of EQ
Self-Awareness
- Self- Confidence
-Realistic Self- Assessment
- Self-depreciation sense of humor
Self-Management
- Trustworthiness and integrity
- Comfort with ambiguity
- Openness to change
Social Awareness
-Empathy: building and retaining talent cross –culture sensitivity, service to client and customer
Relationship Management
-Effectiveness in leading change
persuasiveness
- Expertise in building and leading teams
EI/EQ
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Source: © Daniel Goleman
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
How can Auditors apply EQ during Audits?
Audit Phase EQ Competencies Applicability Stakeholder Engagement Considerations
Planning • Self -Awareness � We must be prepared and self-confident going
into an audit � Forming and building the right team for the audit is
important
• Self-Management � Auditors need to establish trustworthiness and integrity in the planning phase of audit.
� Prepare to accept ambiguity during the audit –processes maybe different than expected, however, not incorrect.
Fieldwork • Self-Awareness � Be confident when performing our testing – review with lead and team
� Have fun during an audit engagement – don’t stress out – team dinners
• Self-Management � Be transparent – keep stakeholder aware of process and issues.
� Invoke “active listening” – understand what the stakeholders are saying – they are the experts.
� Value add proposition – work with the stakeholders to come up with solutions to issues
• Relationship Management � Build a relationship with stakeholders, paths may cross again in the firm
� Common ground - benefits of working as the 1st, 2nd and 3rd Line of Defenses
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“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
How can Auditor apply EQ during Audits?
Audit Phase EQ Competencies Applicability Stakeholder Engagement Considerations
Reporting • Self Awareness � Be as fair as possible during the audit – get
stakeholders buy in.
• Self Management/Regulation � Be transparent – keep stakeholder aware of
process and concern as they develop� Provide insights to issue levels and the audit
report ratings.
• Relationship Management � Reinforce the value of IA the to firm – protecting the firm.
� Empathize with Stakeholders – we are coming in to their shop and reporting what's not working
Other Activities –Business Monitoring, Issue Validation, Risk Assessment
• Self Awareness � We must always be confident when dealing with stakeholders
• Self Management/Regulation � Transparency can build trustworthiness and integrity
• Relationship Management � Reciprocal sharing of information can build stronger relationship.
� Similar interest – protecting the firm
• Social Awareness � Empathetic and collaborative engagement goes a long way
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“Citi Internal Audit – expert, independent and trusted control enhancing assurance”13
The Trusted Auditor and Trust Equation
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
The Trusted Business Auditor…
Friend
Outsider
Trusted
Business
Auditor
TechnicianINT
ER
PE
RS
ON
AL
SK
ILLS
TECHNICAL SKILLS
HIG
HLO
W
LOW HIGH
Source: © ARETAI CONSULTING LIMITED
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Introducing The iTBA
Maintaining
IndependenceBuilding
Trust
“expert, independent and trusted control enhancing assurance”
Source: © ARETAI CONSULTING LIMITED
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
The Trust Equation
=
SOURCE: The Trusted
Advisor (Maister, Green, Galford)
TRUSTCredibility Reliability Intimacy
• Technical
expertise +
‘presence’
• Accuracy &
completeness
• Don’t know, say so
• New perspectives
Self-orientation
• Interest in self vs. interest in ‘client’
• Threats to ‘client’ focus
• Preoccupation with own agenda
+ +
• Dependable
• Repeated
experience of:
• promises =
actions
• fulfilled
expectations
• Talk difficult
agendas
• Personal not
private
• Emotional
honesty
Source: © ARETAI CONSULTING LIMITED
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”17
Listening Challenge and Critical Audit Conversations
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
The Listening Challenge
Being Willing
to Listen
Hearing the
Message
Interpreting the
Meaning
Evaluating
Carefully
Responding
Appropriately
Source: © ARETAI CONSULTING LIMITED
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Three Step Process
ADAPTED FROM CRUCIAL CONVERSATIONS BY PATTERSON, GRENNY, McMILLAN, SWITZLER
1. Establish a Safety Zone
2. Create a Dialogue
3. Share Decisions
3. DECISIONSShareFacts
MutualPurpose
MutualRespect
Ask StakeholderPerspective
Tell
My
Pers
pective
Talk Tentatively
EncourageTesting
1. SAFETY
SAFETY ZONE
2. DIALOGUE
INFORMATION POOL
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Skills For Critical Audit Conversations
BASED ON CRUCIAL CONVERSATIONS BY PATTERSON, GRENNY, McMILLAN, SWITZLER
Share Facts
Tell My Perspective
Ask Stakeholder Perspective
Talk Tentatively
Encourage Testing
S
T
A
T
E
what
how
Source: © ARETAI CONSULTING LIMITED
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Skills For Critical Audit Conversations
BASED ON CRUCIAL CONVERSATIONS BY PATTERSON, GRENNY, McMILLAN, SWITZLER
Share Facts
Tell My Perspective
Ask Stakeholder Perspective
Talk Tentatively
Encourage Testing
S
T
A
T
E
what
how
Source: © ARETAI CONSULTING LIMITED
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Lets engage in a discussion:
What questions do you have
and/or
share your point of view…
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Q & A and Discussion
“Citi Internal Audit – expert, independent and trusted control enhancing assurance”
Thank You!
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