Two MFIA events to underline value added of internal auditor

Two major events will be organised over the next few weeks by the Malta Forum for Internal Auditors as it pursues its mission to elevate the profession’s status and visibility among the local professional community.

Lawyers, architects or engineers make good internal auditors

The first, themed “Value Added by Internal Control”, will be held at the Westin Dragonara Resort, St Julian’s next Wednesday afternoon. It is being organised in collaboration with RSM Malta, the audit, tax and advisory firm which has recently conducted a survey on the theme across Europe.

The programme includes a presentation by RSM Tenon UK director Richard Smith and a networking session. Afterwards newly appointed Forum chairman Christopher Borg will moderate a panel discussion involving Misco founding partner and managing director Joseph F.X. Zahra, MSV Life plc chief executive David G. Curmi, Chartered Institute of Bankers associate Danny Rosso, and Mr Smith.

“Internal control gives added value to an organisation but it comes with investment and resources,” Mr Borg told The Times Business. “The event will seek to present the case for internal control and the differentiators and added benefit it brings.”

The Forum will reinforce the concept at another seminar scheduled for November 7, which will focus on the value added of an internal auditor to the audit committee and management.

The Malta Forum was established in 2007 to increase networking and learning opportunities in the field. Mr Borg and Eugenio Privitelli, his predecessor, are two of the forum’s founders.

“The internal audit profession in Malta is relatively young but it is growing,” Mr Borg said. “We estimate that there are no more than 100 practising internal auditors locally. Some join the profession by design, but many by accident through role rotation. Younger professionals are increasingly choosing to pursue careers in internal audit.”

Mr Borg explains local companies with an internal audit department are few and often have modest resources.

Listing rules require companies to establish an audit committee but not specifically an internal auditor. Insurance regulation requires both an audit committee and an internal audit function as Solvency II makes more demands on governance functions.

Mr Borg stressed how an audit committee’s operation is enhanced when an internal auditor acts as its executive arm, especially because the professional enjoys an autonomous function within the organisation.

“The aptitudes of an internal auditor are quite different from that of an external auditor,” he added. “The role goes beyond the financial statements into operations. Internal auditors must possess soft skills, be analytical and persevering, and have good interpersonal skills as they deal with the width and breadth of an organisation. International companies often deploy people to their internal audit function as part of performance appraisal systems. The aim is to enhance leadership and thinking skills and company knowledge.”

Internal auditors face a considerable learning curve early in their careers. As their role revolves around collecting evidence across operations and corroborating it to give assurance, internal audit teams are usually more effective, able to apply their combined qualities to scrutinising operations.

It is one of the reasons the Forum believes accountants are not always suited to audit functions in all sectors. Some firms, Mr Borg explained, would benefit from appointing lawyers, architects or engineers to their internal audit function. Professionals should also appreciate that internal audit is good management training ground and consider it among their options as they plan their career strategies.