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Members of the Institute of Internal Auditors (IIA) recently re-elected Daniel Mbozi as president of the institute. Mbozi, head of audit at Stanbic, was elected during the Institute’s fifth annual general meeting at Club Makokola in Mangochi. Rankin Nyekanyeka interviewed him about his new term of office. Excerpts: —
How do you feel about being re-elected president?
I feel very honoured and encouraged that members decided to re-elect me as president. It gives me confidence that I and my colleagues in the board did a good job and are moving in the right direction.
What major achievements would you say the institute has had during your leadership?
Our main achievement has been the establishment of an effective secretariat to ensure better service to our members whose interests were not adequately being addressed from the offices of individual board members.
We also managed to get together with our colleagues in government internal audit through the Director of Internal Audit to harmonise and merge our initiatives as one body of internal auditors to jointly build required capacity in the profession with the support of IIA Inc. (USA) and donors.
We have also managed to network with selected training institutions in the country, like the Corporate Governance Centre, and negotiations are at an advanced stage to also involve Malawi College of Accountancy in the training of Certified Internal Auditors (CIAs) as one way of building professionalism among our members through training.
What are the major challenges that you faced?
The major challenges that come to my mind include: —
* Failure by the chapter to adequately inform its members of its role and perhaps its value.
* Weak governance and lack of appreciation for the role internal auditors play in both public and private sectors.
* The relationship between internal auditor in government and private sector was not well developed.
* We were also faced with lack of materials and resources to assist our members acquire desired competencies and skills in internal auditing techniques.
* Scarcity of resource persons with the required skills in internal auditing to facilitate training, seminars, and conferences for the benefit of the members
* International Standards for the professional practice of internal auditing were not well promulgated and widely applied within the profession in Malawi
How did you deal with them?
Challenges relating to lack of awareness by members of the role and value of the chapter have been partly addressed through the establishment of the secretariat. Through the secretariat, we are now able to maintain constant contact with the majority of the members and we are now able to update them on global and regional developments as well as the various initiatives taking place within the Institute and internal audit practice.
The problem of weak governance requires a holistic approach to be adequately addressed. Corporate governance has four pillars namely; Boards of Directors, Executive Management, External Audit and Internal Audit. Successful achievement of good governance in both private and public sector in Malawi hinges on all these four pillars abiding by principles of good governance. In due recognition of this fact, we intend to partner with our colleagues in the external audit, top business executives and government officials and the Institute of Directors which may be launched soon so that we can move and advance together to build a better Malawi founded on good governance principles.
As regards to the relationship between internal auditors in government and private sector, we have agreed to harmonise and merge our initiatives under one body with the support of IIA Inc. in the US to jointly build capacity within the profession in Malawi through CIA certification and training and to network with the Corporate Governance Centre and Malawi College of Accountancy to promote the CIA programme.
On lack of materials and resources to assist members acquire desired competencies and skills, we acquired books and magazine on various topics relevant to internal auditing practice. We also acquired CDs, VCDs, and periodicals. IIA Inc. has also reduced the cost of subscription, examination and registration fees for the CIA programme for Malawi by 50 percent to help us accelerate on the CIA certification programme. The total cost for the entire programme is now around K25, 000.00 only.
As regards to lack of conceptual framework to guide internal audit practice in Malawi, we sourced a number of CDs containing the latest standards for the professional practice of internal audit, which are available for members at the secretariat. Training on the application of the standards to conduct value-adding audits was part of our agenda during the just ended annual conference.
What plans do you have for the institute during your next term of office?
My colleagues and I in the board agreed last year to build the profession in Malawi through the following action themes and all our plans this year will be aligned to them: —
* Building a strong chapter through good governance, administration, funding and establishment of an effective secretariat to ensure better service to our member.
* Building professionalism through training, CIA certification, academic relations and standardisation of internal audit practice in Malawi.
* Building membership through recruitment and retention in due recognition of the fact that the survival of the chapter hinges on a strong membership base.
* Building awareness through participation and representations in various economic and governance initiatives in the country and marketing to enhance the professional standing of internal audit and to increase awareness of the general public of the activities of the chapter.
* Building legal backing by proactively lobbying for seats on various bodies and committees responsible for changing economic laws in the country to ensure that internal audit issues and interests are taken into consideration in all relevant laws.
What is the function of the institute?
Our mission is to be the primary organisation in Malawi representing, promoting and developing the professional practice of internal auditing
What is the difference between an internal auditor and external auditor?
An internal auditor is an employee or an officer of the company answerable to management and the board while the external auditor is not an officer of the company. He reports to the shareholders. His office is statutory under the Companies Act. His main role is to express an opinion on the financial statements of the company. The internal auditors main role is to give assurance to management and the board that the risks of the business have been identified and that adequate and effective systems of internal controls exists to manage the risks.
Why there is failure of companies, reports of scandals and other malpractices in spite of the presence of internal auditors?
The main cause of all these company failures and scandals in government can be summed up in three words “rotten corporate governance”. Unfortunately, good corporate governance has four pillars, Boards of Directors, External audit, Executive Management and Internal audit. It is like a roof supported by four pillars. Any weakness with one, the whole thing faces the risk of crashing. It is my opinion that any attempt to strengthen corporate governance in the land should involve all the pillars. And while, as a profession, we are partly to blame for this sad development, I think it is proper for the entire business community and government officials in Malawi to appreciate that internal audit effort is rendered useless if management and the board do not act upon its recommendations.
What do you think should be done to improve the image of auditors in this case?
The image of any auditor is substantially improved if they do their job professionally and management and the board believe that they are adding value to the company by not only picking on what is going wrong but also coming up with recommendations to improve efficiency and effectiveness of their organisations.
Why is it that Malawi has only one CIA?
It is because we have just started pursuing the route of professional certification as one way of building professionalism within the membership. Just two years ago, Malawi had no certified internal auditor. Now we have one. In November this year, 10 people will be sitting for CIA examinations. I prefer to look at this issue in terms of continuing capacity building. I am certain that by November 2005, Malawi will have at least 10 CIAs.
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