23 October 2016
Internal audit is an important discipline that demands specific skills, abilities and knowledge. Photo: HKEJ
Internal audit is an important discipline that demands specific skills, abilities and knowledge. Photo: HKEJ

ACCA, IIA join forces to boost internal audit industry

The Association of Chartered Certified Accountants (ACCA) has teamed up with the Institute of Internal Auditors (IIA) to develop the Certified Internal Auditor (CIA) Challenge Exam that will be available to ACCA members in November 2015.

This initiative will provide an opportunity for ACCA members to become CIA certified through a customized exam, which will include key syllabus and learning outcomes of the CIA exam.

As a senior ACCA member and also an IIA member, I earned the CIA certification more than a decade ago.

My work requires a high level of accounting knowledge and skills, and I have been reminding my peers about the importance of internal audit. I often tell local authorities about the need for corporate risk management and the important role played by internal audit.

The Hong Kong Stock Exchange has published a consultation paper in June 2014 on proposed changes to the section of its Corporate Governance Code and Corporate Governance Report relating to internal controls.

The consultation concludes that the internal controls section of the code should place greater emphasis on risk management.

This means that listed companies can no longer ignore internal control as it is an integral part of risk management.

I’ve kept urging the local accounting association to figure out how to improve and certify local accountants for their internal audit knowledge.

Alan Hatfield, executive director for strategy and development at ACCA, explains: “Internal audit is an important discipline that demands specific skills, abilities and knowledge. Through ACCA training, our members have already developed essential skills concerned with risk, internal control and corporate governance, all of which are seen as crucial aspects of effective internal audit.

“However, with so much recent scrutiny in the news regarding the absence or poor quality of internal audit and its impact on shareholder confidence, this is an opportune time to invest in internal audit.”

My personal experience shows that accounting knowledge and skills are a sort of a language, which enables us to communicate effectively with participants from different business sectors.

A unified set of accounting standards has helped us to reduce misunderstanding and transaction costs.

Internal audit know-how is just the opposite. It allows us to walk in any company and find out problems with our sharp risk management senses.

When I read a financial statement, I would often think how these figures go through a journey and make their way into the financial statement.

The journey involves different considerations, as well as evaluation at different levels, which may reflect the management’s operational targets.

I can often spot mistakes very quickly. That always astonishes my colleagues, and they ask whether I’ve supervised the company on site.

I often go to the field to verify my observations, and then I gain good knowledge about the company’s operations.

This is an excellent opportunity to allow existing ACCA members to further develop their expertise in this specialized field, in which being qualified clearly matters.

Offering the CIA Challenge Exam to ACCA members is an added value. Members working in internal audit, or those who are looking to develop a career in internal audit, can obtain the CIA designation and clearly demonstrate their expertise in this area.

Horace Ma Chun-fung is the writer of this article, which appeared in the Hong Kong Economic Journal on July 31.

Translation by Julie Zhu

[Chinese version中文版]

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