Interview: Internal Audit Developments in Lebanon
President IIA Lebanon
CVMENA: Could you please provide us with some background on the Institute of Internal Auditors (IIA) of Lebanon?
Malek Costa (MC): The Institute of Internal Auditors (IIA Global) is an international professional association established in 1941 in the United States. IIA Global is the global voice of Internal Audit, having currently more than 180,000 members in over 165 countries. IIA-Lebanon was established in 2001 as a local chapter of IIA Global. It is an association of individual members that aims to link the internal audit profession to different industries. All members commit to follow the IIA Code of Ethics and International Professional Practice Framework (IPPF). Currently IIA-Lebanon has more than 270 members originating from different business sectors. Any person can become a member if they have a Certified Internal Auditor (CIA) certificate— or one year of experience in internal audit and a clean legal record.
CVMENA: What is IIA-Lebanon’s strategic direction for the country and how is this reflected in the role it is currently playing?
MC: Our objective is to promote the internal auditing function in government and the private sector through the application of the IIA Code of Ethics and the IPPF. IIA-Lebanon offers annual training and seminars to assist internal auditors in professionally accomplishing their duties, and to inform the public about the importance of the internal auditor role and key responsibilities. The public learns about what internal auditors do in terms of providing value-added services, evaluating the risk management process, assessing the ethical climate, assessing the effectiveness and efficiency of operations, serving as a safety net for compliance with rules, regulations, and best business practices, performing consultative activities, being a cornerstone of strong governance, and so on.
CVMENA: As experts in the area of internal audit, how do you see IIA-Lebanon contribute to promoting and supporting private and public governance in Lebanon?
MC: In 2012, The IIA released a practice guide called “Assessing Organizational Governance in the Private Sector.” It was designed to provide Chief Audit Executives (CAEs) in the private sector with direction on how to assess and make recommendations for improving governance.
In 2014, the IIA released a new guide, “Assessing Organizational Governance in the Public Sector.” This practice guide addresses the following:
· It adapts “Assessing Organizational Governance in the Private Sector” to suit the unique needs of the public sector;
· It is designed to help public sector boards, audit committees, CAEs, and audit staffs assess governance; and
· It is intended to be fully applicable to government and all publicly-controlled or publicly-funded agencies, enterprises, and other entities that deliver public programs, goods, or services.
IIA-Lebanon will use these resources, and the IPPF and its expertise in promoting and ensuring compliance with the practice guides related to governance in both the private and public sectors.
CVMENA: To what extent is IIA-Lebanon reaching out to and coordinating with universities in Lebanon?
MC: IIA-Lebanon is working in coordination with the universities to launch the Internal Auditing Education Partnership (IAEP) program, developed to respond to the growing interest in internal audit education at institutions of higher learning. The program also addresses a general need by practitioners interested in hiring students who possess a well-rounded skill set for conducting internal auditing.
The IAEP program prepares students with the skills and knowledge to help them conduct basic internal audits immediately upon hire. It also provides a foundation to begin preparing them for the Certified Internal Auditor (CIA) examination. Currently this program is being taught by the Lebanese American University and our aim is expand it to most universities in Lebanon.
CVMENA: As you know, Lebanon is committed to establishing the internal audit function in the public sector in the near future with the support of a World Bank-financed project entitled “Public Financial Management Reform II”. How can IIA-Lebanon contribute to this reform?
MC: Internal auditing of the public sector is arguably one of the most challenging segments of the audit industry— especially with the constant media attention and the eyes of the citizens sharply focused on their government’s operations and finances. IIA has developed the Internal Audit Capability Model (IA-CM) which is intended to be used globally as a basis for implementing and institutionalizing effective internal auditing in the public sector, and as a road map for orderly improvement to strengthen capabilities within internal auditing. As such, the IA-CM is a framework that describes the fundamentals needed for effective internal auditing. It outlines an evolutionary path for a public sector organization to follow in developing effective internal auditing to meet the governance needs of the organization and professional expectations. IIA-Lebanon, with the guidance of IIA Global, remains committed to assisting public sector auditors in the effective discharge of their important duties and will continue to take proactive efforts toward enhancing and elevating the role and stature of auditors in the public sector. Becoming a Certified Government Auditing Professional (CGAP) through the IIA has never been more vital for public sector auditors in demonstrating their commitment, competence, and credibility.
CVMENA: What has IIA-Lebanon achieved on the regional level?
MC: IIA-Lebanon is a leading institute in the region, where we are members of the following organizations:
· IIA Global Committees: charged with specific missions and work to enable The Institute to meet the changing needs of its membership. The committees assist the board in the decision-making process by providing information, recommending courses of action, and undertaking specific projects or tasks;
· Union Francophone de l’Audit Interne (UFAI): Established in 1988 with the objective of promoting and developing the professional practice of internal auditing in those countries that are fully or partly French-speaking; and
· Founding member of the Federation of Arab Institute of Internal Auditors (FAIIA): the main objectives of the federation include creating an Arab task force within IIA Global to ensure that regulations and laws related to the internal audit function in Arab countries are in conformity with the IPPF.
CVMENA: What are the IIA-Lebanon aspirations for the future of the profession in Lebanon?
MC: IIA-Lebanon aims to have internal auditors in both the public and private sectors with the following skills:
· Obligatory certification
· Strategic thinkers
· Boardroom presence
· Leadership skills
· Business oriented
· Unquestionable ethics and integrity
CVMENA: Finally how can cooperation between the World Bank and the IIA-Lebanon be strengthened in the future?
MC: Potential cooperation could materialize in relation to the World Bank-financed project, “Public Financial Management Reform II”, whereby IIA-Lebanon and IIA Global resources, practice guides and expertise can assist the government in establishing the internal audit function in the near future. In addition, IIA-Lebanon is willing to cooperate with the World Bank in any project related to the internal auditing role in control, risk management, compliance and governance. I would like to thank World Bank team for this opportunity and for their continuous efforts in making the world a better one.