1. Slide Heading Enhanced Professional Development Skills Norm Kelson, CPA, CISA, CGEIT The Kelson Group November 18, 2009 © The Kelson Group, 2009

2. Agenda Slide Heading Identifying our skill set needs Fulfilling the skill set Enhancing our staff Providing value to the organization © The Kelson Group, 2009 2

3. How Has the Audit Landscape Changed? © The Kelson Group, 2009 3

4. How Has the Audit Landscape Changed? (2) © The Kelson Group, 2009 4

5. How Has the Audit Landscape Changed (3) © The Kelson Group, 2009 5

6. How Has the Audit Landscape Changed (3) © The Kelson Group, 2009 6

7. What Do I Need to Know About My Organization? Internal Audit –Mission –Audit Charter Business –Long term strategy –Industry –Best practices within industry –Regulations Technology –Current architecture –Architecture of the future Application Portfolio –Applications topography –Applications functionality © The Kelson Group, 2009 7

8. What Do I Need to Know About My Organization? (2) IT Service & Delivery Architecture & Practices –In House –Out Sourced Governance Framework –COSO? –IT Governance Framework – CobiT/ITIL Compliance Approaches & Requirements –AS5 –GLBA –PCI-DSS –HIPAA –Federal/State/Local data privacy requirements Enterprise Risk Management Approach © The Kelson Group, 2009 8

9. Senior Management Drivers © The Kelson Group, 2009 9

10. IT Audit Universe Which Audit Landscape? –Historical –SOx Era –Today –Next 5 years © The Kelson Group, 2009 10

11. Skills Required Communications & Interpersonal Skills –Ability to relate to audit customer –Understand their needs –Argumentation skills –Communicate to technical and non-technical constituencies – written and oral Business skills –Industry expertise –Finance/accounting subject-matter competency Business process –Understanding of business process –Specific processes to enterprise Controls management –Controls framework –Control objectives © The Kelson Group, 2009 11

12. Skills Required (2) Risk management –Risk assessment methodologies –Enterprise-adopted risk management process Value management –Ability to relate control requirements and risk management into a value to the organization Project management –Ability to manage internal audit projects –Ability evaluate effectiveness of enterprise and business projects IT Technical –Core technical functions –General IT functions © The Kelson Group, 2009 12

13. Take Inventory Results of Enterprise Risk Assessment –Essential Audits – Rated “A” –Needed Audits – Rated “B” –Nice to Have Audits – Rated “C” What resources needed for “A” and “B” audits? –FTE’s –Skills What resources available? Result is your delta 13 © The Kelson Group, 2009

14. Auditor Skill Sets © The Kelson Group, 2009 14

15. Subject Matter Experts Sources –Financial / Operational / Business / IT Auditors –Internal rotation from technical department –External Non-core audit requirements Internal SME deficiency © The Kelson Group, 2009 15

16. Essential Training Internal Audit Concepts Business / Industry Concepts Finance/Accounting – scope for IT auditors more limited Business psychology – as needed Communications, Argumentation, Written & Oral Presentation IT Technical – core functions © The Kelson Group, 2009 16

17. How Do I Receive Value from Internal Audit Invest in good personnel –Talented staff –Competent and focused training –Reasonable compensation –Reasonable working conditions and tools Allocate resources to your staff’s strengths Identify and select audits that fit the risk assessment Keep audit rotations to a minimum of 24 months © The Kelson Group, 2009 17

18. How Do I Receive Value from Internal Audit (2) Use staff for recurring audits, assign consultants to specialty and non-recurring audits Consider building audit teams by line of business –Cohesive team –Lessens learning curve –Include IT audit in Line of Business team Keep turnover to a minimum (cost of replacement extremely high) Budget reasonable time to an audit – don’t squeeze staff © The Kelson Group, 2009 18

19. How Can I Build a High Performance Team Resolve Personnel Issues Provide Opportunity Empower Provide training Support team 19 © The Kelson Group, 2009

20. Personnel Issues Understand the drivers of each generation Economics push staff –Recognize burnout –Build for tomorrow – don’t deplete the staff –Mirror staff with management expectations Employee Mentoring –Understand employee career goals Seek opportunities within company Keep employee for reasonable period of time Outplace employees not fitting in –Provide an open door policy to assist employee in performing duties Manage but don’t micro-manage Run interference where appropriate –Support employee within and outside department –Respect © The Kelson Group, 2009 20

21. Training Meaningful training to fit Audit Plan Design training plan for each staff member –Technical training Specific expertise Industry expertise –Management skills Leadership GRC management Project management –Business skills Presentation skills (oral and written) Finance/Accounting Industry concentration Quality programs Training program tailored to the needs of each employee Consider distant learning, where possible –Give staff time to utilize distant learning 21 © The Kelson Group, 2009

22. Certification Encourage obtaining and maintaining certifications for job function: –Audit related: CPA, CISA, CIA, CFE –Security related: CISM, CISSP –GRC CGEIT, IT Risk – (soon to be announced) Certification preparation –Reimburse for certification test fees, reasonable refresher or study courses –Time off to sit for test –Time off for preparation (reasonable) Certification maintenance –Reimburse for yearly fees –Provide training opportunities and reimbursement to maintain certification in good standing 22 © The Kelson Group, 2009

23. Management Build a team of complimentary skills Foster open dialogue Provide feedback Meet with customers – foster relationships and represent department 23 © The Kelson Group, 2009

24. Key Areas for Professional Skill Enhancement Governance and related practices Understanding for financial processes Understanding business processes Maintaining core IT technical skills Improving soft skills © The Kelson Group, 2009 24

25. Questions? © The Kelson Group, 2009 25

26. Contact Information Norm Kelson Telephone: (781) 784-4390 Email: nkelson@thekelsongroup.com © The Kelson Group, 2009 26