1 Internal Auditing: One Professional’s Perspective Russell D. Price, CPA, CIA, CISA Sr. Audit Manager

2 Agenda  Introduction  What is Internal Auditing?  How to get started in Internal Auditing  The IIA and You Ask questions at any time … don’t be shy!

3 Introduction – Russell Price  Current Assignment: Sr. Internal Audit Manager  Intel experience: 7.5 years –Sr. Audit Manager – IT / Corporate Finance –S-Ox §404 IT Program Manager –Prior roles: eAP Program Manger; PARIS Program Manager  Prior experience: 18 years –Big 4 Audit / IA / Business Consulting (Andersen, E&Y) – 6 years –Operations / Corporate / EMEA F&A (Tektronix) – 3 years –Operations Management / F&A (P&G, Frito-Lay) – 9 years  Education / Certifications: –BSChE – Oregon State University –MBA – Portland State University –CPA – Washington, Oregon (reciprocity in progress) –CIA (Certified Internal Auditor) –CISA (Certified Information System Auditor)

4 What is Internal Auditing?

5 The IIA’s Definition of Internal Auditing Internal auditing is:  An independent, objective assurance and consulting activity designed to add value and improve an organization’s operations  It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

6 Internal and External Audit Internal Auditors  Integral to organization  Ongoing monitoring and assessment  Concerned with financial and non-financial risks  Detection / prevention of fraud  Future focus External Auditors  Independent of the organization  Annual opinion on financial statements / internal controls  Concerned with financial risks  Historical focus Different but Complementary Roles

7 Cornerstones for Corporate Governance Internal audit provides assurance to management and the audit committee that risks are understood and managed properly.

8 Key Responsibilities of Internal Auditors  Function as one of the cornerstones of good governance  Provide value-added services  Evaluate the organizations risk management process  Recommend process and controls improvements  Perform consultative activities

9 Impact of Enterprise Risk Approach Cash/Liquidity IP Policy Compliance BOD Practices Nat Disaster/Terrorism Technology (Operational) Supply Chain Volume Cost Pricing Product Roadmap Brand Market Intelligence Competition Human Capital Acquisition Integration F/R Compliance Local Laws/Restrictions Fraud/Other Misconduct Succession Planning Technology (Strategic) Customer Satisfaction Channel Capacity Avail. & Utilization Resources Reputation Product Liability Anti-Trust Compliance Tax Compliance FCPA Compliance Product Execution Partnerships Investment Divestiture Mgmt Restructuring Valuations & Estimates Foreign Currency Customer Credit Planning & Forecasting EHS Compliance Contract Compliance Privacy Compliance Market Concentration Network & IT Infra (Strategic) Inventory Manuf. Cost & Affordability Manuf. Start-up Cost Network & IT (Operational) Portfolio Management Spending None Impact Likelihood Product Qual. Audit Judged Demand Audit Digital Home CE POP Audit IMFT JV Audit Demand Forecast Apps Site Selection Process Audit HHG Divestiture & Supply Agree. Audit Design Tool Apps IT Governance

10 The Profession of Internal Auditing  Allows for an expedient, high-level understanding of the organization and industry  Exposure to senior-level management  Transferable skills/disciplines  Networking opportunities  Expanding profession  Potential travel

11 It’s A Great Time To Be An Internal Auditor  Growing Profession … thanks to SOX!  Not Just for Accountants  Good Starting Salary and Upside Potential  Great Opportunities  High Visibility

12 Internal Audit Salaries Average total base compensation

13 Public Accounting Salaries Average total base compensation

14 Attributes of a Successful Internal Auditor  Demonstrates Objectivity and Integrity  Strong Analytical / Fundamental Auditing Skills  Creative, Inquisitive, Problem Solver  Sound Business Acumen  Good Negotiator / Influencer  Active Listener, Exceptional Communicator  Confident  Intuitive

15 How do I become an Internal Auditor?  Take relevant courses in school  Internships / entry-level programs  Gain various types of experience –Public accounting –Private industry –Government  Network at local Professional Associations (e.g. the IIA)

16 The Institute of Internal Auditors (IIA)  International Professional Association (  Established in 1941  Global Headquarters in Florida  Over 125,000 members  165 countries and territories

17 The IIA Vision The IIA will be the global voice of the internal audit profession: Advocating its value, promoting best practices, and providing exceptional service to its members The IIA’s Broad Objectives   Acceptance of the internal auditing profession   Increase internal auditing capacity   Provide better services for our members

18 Development of Standards and Guidance  Internal Auditing Standards Board  Exposure Draft Process  Approval and Implementation Date  Professional Issues Committee

19 Certification Program  Certified Internal Auditor  Certified Government Auditing Professional  Certification in Control Self-Assessment  Certified Financial Services Auditor

20 IIA Membership  The IIA is an association of individual members  All members commit to follow the IIA Code of Ethics and International Standards for the Professional Practice of Internal Auditing  Members are served via local chapters or affiliates, or directly as members-at-large (where no chapter/affiliate exists)

21 “What’s in it for Me?”  Professional Guidance  Advocacy  Training  Networking*  Certification*  Specialty Programs  Technology  Publications  Services*  Local Contacts  And more…

22 Audit Career Center  Career Opportunities  Online Resume  Search Postings

23 How Do I Join The IIA?  In Canada, the Caribbean, or the United States join The IIA directly.  Outside Canada, the Caribbean, or the United States join The IIA directly through an IIA affiliate in the local region