Corporate Governance

The Implications for Internal Audit

Corporate Governance
Outline of Presentation: Focus on issues related to Internal Audit

Background - Corporate Failures

Corporate Governance Reviews University Governance The Council

Internal Audit Groups, Audit Committees & management

Corporate Governance
Background - Corporate Failures: International Enron, Worldcorp

Australian National Safety Council, HIH, One Tel, Ansett, Harris Scarfe

Corporate Governance
Recent Reviews of Corporate Governance: Principles of Good Corporate Governance and Best Practice Recommendations, Aust. Stock Exchange Corp. Gov. Council, March 2003 The Failure of HIH Insurance, HIH Royal Commission, April 2003

Corporate Governance
Recent Reviews of University Governance: Meeting the Challenge The Governance and Management of Universities, DEST, Aug. 2002 Review of University Governance, Vic. Dept Ed.&T., May 2002 Review of New Zealand Tertiary Education Institution Governance, M. of Ed., NZ Gov., May, 2003 Report of the Auditor-General on RMITs finances, Vic. A-G, June 2003

Corporate Governance
Federal Budget Additional Funding tied to Governance: Council numbers restricted to 18 Councilors as trustees, not representatives of particular constituencies

Formal program of professional development of Councilors

Restrictions on Council delegations

Industrial relations and student unionism requirements

Corporate Governance
Council Issues Identified: Independence of Councilors

Remuneration of Councilors

Non-delegation of primary responsibilities

Councilor Code of Conduct

Management information

Risk management

Corporate Governance
Internal Audit Issues Identified: Internal Audit function

Independence of Audit Committee

Effectiveness of Audit Committee

Audit Committee Charter

Corporate Governance
Internal Audit Groups & Audit Committee Effectiveness directly related to effectiveness of the Audit Committee: Independence Skill set Process management Relationship with management

Annual Audit Program focus: Strategic Risk based Management input Flexibility

Corporate Governance
In Summary:

A background of Corporate Failures

Corporate Governance Reviews

The makeup of University Councils

Implications for Internal Audit Groups

Where to now?

Corporate Governance
A way forward:

Government focus on University Councils

Independence of Councilors

Effective Audit Committees Internal Audit relationships management & Council

Effectiveness of Internal Audit