President's message

Continuous Professional Education
The Institute of Internal Auditors Singapore (IIA Singapore) is dedicated to the advancement and development of the internal audit profession and we continually seek to develop new seminars and conferences, addressing relevant, trending and updated topics. For the first half of 2015, we have two important events lined up; the Public Sector Internal Audit Conference on 9, 10 April and the Asia Leadership Internal Audit Programme between 25 and 29 May. As we transit into an era of greater complexity and volatility, it is imperative for Internal Auditors to raise the bar of their capability and competency to contribute to organisational transformation towards high performance. The Asia Internal Audit Leadership Programme is specially tailored for aspiring and senior Internal Audit practitioners, keen on refining and enhancing their leadership skills to provide thought leadership. This intensive 5-day program is facilitated by two experts from the Wharton School and participants will also meet and hear from invited prominent practitioners to share their thoughts and experiences in the Programme. Jointly launched by IIA Singapore and the Singapore Accountancy Commission (SAC), it is positioned as the first programme in Asia to formally groom Internal Audit leaders. It is designed by TMS Academy the integrated leadership development arm of Temasek Management Services Group, a wholly-owned subsidiary of Temasek Holdings. The second important event on the calendar is the annual Public Sector Internal Audit Conference. The theme this year is “Unlocking the value of internal audit – For an efficient and effective government”. Given the vital role played by internal audit in strengthening corporate governance, internal controls, risk management and value-for-money initiatives in the public sector, internal audit is also expected to be mindful of external threats and internal weaknesses facing the organization. The conference will share ways to unlock the IA value, insights and market practices to overcome emerging issues and challenges that the organisations may face. As we continuously strive to provide quality education, we welcome members’ inputs to help us in designing programs that meet your requirements so that you can excel in your work and in your career! Yours Sincerely Eric Lim President

2014 Reflections For Internal Auditors

We had an eventful year in 2014! Major happenings involving changes in political leadership, international conflicts, epidemic outbreaks, natural disasters and cyber-attacks unfolded at relentless speed, presenting opportunities to some on the one hand and numerous threats to others on the other hand.


How did internal auditors fit into this puzzle? We may be special. Do we view threats as opportunities for our work? Opportunities for us to identify risks affecting the organisations we work with? Opportunities to identify processes for consideration and to incorporate them into our audit universe and the audit work plan?  The intent and priority is to always safeguard the interest of these organisations; to provide accountability, comfort and assurance to key stakeholders.


On this note, I wish you all a purposeful and fruitful year in 2015.

Thank you. 


Yours Sincerely

Eric Lim


Taking Stock

As the calendar year 2014 is drawing to a close, many would start to take stock. What have I accomplished in my work and what else could I have done to make the year a fulfilling one? The answer could be there is no end to self challenge ourselves to do more; and do better to have a greater impact on our organisations.  

How could you do better? One way is to seek a path of continuous personal development and continuous training. We need to take stock of our skill set and identify gaps. We can raise the bar by enhancing and sharpening our skills and re-skilling to move in tandem or even ahead of the changing times and global environment. Doing so, we will keep ourselves effective and relevant to support our stakeholders responsibly; and according to what the market demands from IA.  

IIA Singapore in the coming year will be active in providing market driven training courses to cater the needs of our members. One important hall mark programme for leadership will be launched in 2015. Watch out for the news!

Yours Sincerely

Eric Lim


Demonstrate IAs' Uniqueness

Internal Auditing is a unique profession. Hence, it should be viewed as a unique value adder. When do we demonstrate IAs’ uniqueness? One best time should be when we conduct auditing. IAs must be able to provide unique insights from our observations during auditing which are unfathomable to the process owners and management. Equally important, the solutions that come with it must be unique too. This may be easier said than done but this should be something IAs should strive for. Food for thought!

Yours Sincerely

Eric Lim


Productivity is the key to competitiveness

From 2008 to 2013, Singapore’s GDP grew at an average annual rate of 6.8% whilst the labour workforce grew at 3.4% with a majority of negative productivity growth during the same period. 


Being an open economy and without natural resources, Singapore needs to be competitive otherwise it finds it difficult to export goods and services competitively as well as attract investments to grow its economy.  Hence, productivity is crucial to maintain our competiveness. Acknowledging its importance, the Singapore Budget 2010 set the target of 2% - 3% productivity growth over the next decade to drive 60% of future Gross Domestic Product growth.


Generally, productivity is a measure of how efficiently and effectively a business or an economy uses inputs such as labour and capital to produce goods and services. It is not only about controlling costs in the businesses but “doing things right” and “doing the right things” and doing them well to achieve maximum efficiency and value.


Where and what can the internal auditors offer in the organisations they work for. Let us re-examine our internal auditing definition, i.e. “…it is an independent, objective assurance and consulting activity designed to add value and improve an organisations’ operations.” It is without much doubt that IAs do play a greater role in the organisations to help management enhance productivity. As a matter of fact, our Annual Work Plans would have include projects relating to operational auditing, value for money audit, performance audit or 3 Es. Of course, we should acknowledge that the business owners too play a role in enhancing productivity too. Should IAs re-think and think big, and work together with the key stakeholders on the things that matters to the organisations so as to be seen as a valued player to achieving the overall goal of the organisations?


Yours Sincerely

Eric Lim


Job Rotation
Most top organisations have HR policies that contribute to strong Corporate Governance; one of which is the job rotation scheme. This policy is with good intent. Some use it to groom staff for higher appointment while others use it to develop their staff through enhancing their skill set, knowledge and experience to better contribute in their jobs. However, there is limitation among others on job rotation as not all staff can be rotated to another job or can be easily rotated due to the nature of the work. Where a company practices job rotation, cost may be a concern, as it comes with a learning curve that consumes time and efforts and to a certain extent, operational disruption to the organisation. Notwithstanding this, rotation would more likely to bring net positive effect if it is properly planned and managed. As internal auditors, we may view job rotation as part of HR policy to contribute to corporate governance. This is where staff manning new work area has its merits. Being new, he will likely to go through the policies, procedures and systems and reports so as to understand the operations. Armed with his prior experience, he may be able to recommend changes to make the operation more robust. This staff rotation is like management directing its own “auditor” to self-audit its activities. While in the scheme, the staff will apart from gaining fresh perspective may bring positive outcome where he may spot pleasant and unpleasant things such as potential or real control weaknesses. With such schemes, most incumbents will buck up to ensure that their systems and activities perform efficiently and effectively with no unusual activities as most would not want a new comer to provide negative outcomes but positive outcomes. The new comers even so would be motivated to do well to exhibit their contributions. The view is that the job rotation scheme acts as a preventive mechanism to deter staff from committing unacceptable activities and motivate them to perform well; as well as a detective mechanism to uncover unacceptable behaviour and undesirable activities. We have seen a number of cases where staff under job rotation scheme prevented and uncovered wrong doings. Of course, there are other mechanisms to do this as well. Internal Auditors may value job rotation as one possible form of recommendation in enhancing the organisational governance framework. Yours Sincerely Eric Lim President

Reporting Line of Chief Audit Executive?

Who CAEs report to varies from companies to companies. We have seen that some CAEs report to ACs, some to CEOs, some to COOs, some to CFOs, CTOs and so on.


Why the variations?  There could be multiple of "theories".  Some organisations value the objectivity and independence of CAEs, thus making them report to the ACs. Some decide to let CAEs report to CEOs so that the latter will be abreast of what goes on in the organisations. There are others which may not see the importance of positioning the CAEs appropriately in the organisation, thus making them report to someone like COO, CFO, and CIO from the C-suite.


There are some who asked, what should be the ideal reporting line for CAEs? 


The question is answered in the International Professional Practices Framework (IPPF), the global authoritative guidance on internal audit profession.  The IPPF Standards requires that the IA activity must be independent. So, under Standards 1110, the CAE must report to a level within the organisation that allows the IA activity to fulfill its responsibilities. The CAE must confirm to the board, at least annually, the organisational independence of the IA activity.


With this, to achieve organizational independence, the IPPF Practice Advisory 1110-1 advises dual reporting where the CAE reports functionally to the AC and administratively to the organisation’s CEO. Reporting functionally to AC/Board would enable the CAE to help AC in its oversight role and providing independent and objective assurance that governance, risk and control processes are functioning effectively. Noting that CAE is still part of the organisation, thus his administrative relationship with the CEO will enable him to execute his IA functions effectively to meet the mission of the organisation.  


It is important to note that the Principle 13 of the Singapore Code of Corporate Governance (the “Code”) states that the company should establish an IA function that reports functionally to the AC Chairman and reports administratively to the CEO, which adopt the guidance of IPPF.  Although compliance to the Code under the purview of SGX and the MAS is not a must, listed companies are required under the SGX Listing Rules to give explanations for deviations from the Code in their annual reports.


To check the robustness of the CAE reporting line, we should ask whether the relationship provide independence and objectivity in the IA work. If it does not, as conflict of interest exists, then this relationship needs to be reviewed otherwise it may jeopardise the interest of the organization; and the stakeholders may suffer because of lack of independence and objectivity.      


The solution is for AC to work with management to come up with a resolution that addresses both the management’s concerns and the AC’s need for an independent assessment of internal controls. Furthermore, the AC could make assessments on whether the IA function that reports direct to AC would be better supported if it reports administratively to the CEO.


To conclude, all parties should use the IPPF as a guide in coming with the reporting structure that provides the best governance for the organisations.


Yours Sincerely

Eric Lim


Building Capability and Capacity

Internal auditing services are growing in demand in organisations today as organisations are facing numerous challenges on many fronts; such as increasingly complex business environment, evolving regulations and organizational changes. Demands may also arise from regulatory authorities, board, CEO/senior management, line managers and external auditor. 


As it is CAE’s responsibility to ensure that IA resources are appropriate, sufficient and effective, he too has the responsibility to ensure its capability and capacity are ready to meet the stakeholders' demand and expectations. However, what could CAE do if IA’s capability or capacity is inadequate or both are inadequate? Generally, apart from adding manpower and tools, out-sourcing, co-sourcing or in sourcing would be one or a combination of these actions taken. The resourcing of IA activity should be planned ahead during the annual workplan stage as additional budget would be needed if the audit activities are to be outsourced and/or when internal resources such as manpower and facilities are required from other departments. However, the resourcing could be quite challenging for those IAs which may not have the budgets or/and avenues to build their capability and capacity and even so if they lack support from their boards/managements .  


Hence, it is always a great challenge for CAEs is to build up the capability and capacity of their internal audit department in anticipation of the demand.


Yours Sincerely

Eric Lim


Message 16

Dear Members,

August 29th, 2012 was a significant day for IIA Singapore. A Memorandum of Understanding was inked between The Pro-Tem Singapore Accountancy Council ("SAC") and IIA Singapore ("IIAS") during the IIA Annual Conference and Leadership Forum at the Resorts World Sentosa Convention Centre. Under this MoU, SAC and IIAS will jointly develop and roll out a new post-university certification programme designed for internal auditors.

The programme aims to provide a structured training pathway for aspiring internal auditors and advance the career of existing professionals for leadership roles in their organisations. A Working Committee has been formed to develop the Asian-flavoured programme and it is planned for launch in April 2013.

Another notable moment was our 2012 Annual Conference and Leadership Forum held last week. The event was a resounding success with a record high participation from our members this year. Thought leaders and members had a good exchange of ideas and sharing during this event and we received so much positive feedback from you. The Guest of Honour, esteemed speakers and panellists as well as our conference organising committee all played a crucial role in contributing to the event's success. We look forward to serving our members even better in our 2013 conference.

I am on my third week of my first term as President of IIA Singapore and I am looking forward to work with the Board and the IIAS management team to build on the good foundation which has already beenlaid down by the previous Boards.

Our key focus in the coming year is to deliver premier services to our members. For the coming FY, we will work on 3 key areas,


a) Our IIA Academy Education Programmes

b) Our Member Resources

c) Our Service Quality at the IIAS Secretariat

Of vital importance is your feedback to us. We look forward to your input on how we serve your needs as a member and as an internal auditor in bringing our profession forward this coming year.

Eric Lim

President, IIA Singapore

Message 15

Dear Members,

For the second year running, The Institute of Internal Auditors Singapore, Securities Investors Association (Singapore) and Singapore Management University have jointly collaborated to present this year's Internal Audit Excellence Award at the SIAS 13th Investor Choice Awards 2012 held last night.

The objective of this award is to promote greater awareness of the importance of an effective internal audit function in Listed Companies. This award recognises companies that have put in place an effective Internal Audit Function to enhance corporate governance, risk management and assurance.

IIA Singapore heartily congratulates the following winners:

Winner of the Internal Audit Excellence Award: DBS Bank Ltd

Runner-up: Singapore Airlines Ltd

Runner-up: Cerebos Pacific Ltd

Merit Award: Oversea-Chinese Banking Corporation Ltd

Special Recognition Award: Mr. Lim Him Chuan, Managing Director and Head of Group Audit, DBS Bank Ltd

Another milestone initiative by IIA Singapore this month is the offering of student memberships at $20 per annum. Via this initiative we hope to create opportunities for university students to understand what the profession is all about through our resources, and interest them to pursue a career in internal auditing upon graduation. It is our long-term strategy to cultivate a pipeline of future internal auditors for our members and the profession. We hope you as members can be our ambassadors to spread the word of this initiative.

We hope to provide on-going quality services to members. If you haven’t noticed already, all corporate members have been issued individual passwords that grant access to the IIA Global website. The website is one of our member benefits and is rich in internal audit resources to help members carry out their work better.

One the regional front, last month, the IIA Singapore Secretariat office was paid a learning visit by a group of more than 20 auditors from Jiangsu Province, China. They had contacted us with interest in our membership and certifications, and they also asked about internal audit practices in Singapore. The President and one of our Governors, Hwee Tin, were here to host them.

On the global front, the IIA International Internal Audit Standards Board has released revisions to the Standards this month. The new Standards will be effective January 1, 2013. To keep our members up to date with the revisions, we have organised a complimentary evening talk on Oct 11th. Special thanks to our past president, Tan Peck Leng who will be presenting the revisions to our members.

And finally, on a lighter note, IIAS and ACFE are collaborating to hold a networking event for members in the form of a whiskey-tasting session on Oct 12th at Senso Ristorante. We will be organising more social events in the future and we hope to see you!

Eric Lim

President, IIA Singapore