Internal auditing in the spotlight
The new CEO of the IIA SA believes the time is right to elevate the role of the internal auditor.
Julius Mojapelo joined Institute of Internal Auditors South Africa (IIA SA) in June 2020 after an interview process that was conducted via Zoom. Since then he has only visited the offices three times, but has already begun working on several strategic initiatives. This includes adapting the organisation to navigate a digital workplace post-Covid-19 as the face-to-face customer model is no longer possible.
“We’ve very quickly adapted to the virtual space. We hosted our first national conference online as well as regular webinars each month. Our teams are managing all queries virtually. As we operate in a knowledge economy without physical products, we are well-suited to this new type of working,” says Julius.
Julius has a five-year term with the IIA SA and building on the institute’s sustainability and relevance is a key focus area. “I want to move the organisation from having an institute-focused culture to having a member-focused culture. How we proceed in a post-Covid-19 world creates new challenges for our industry and will force us as the IIA SA to work smarter, be more innovative and more responsive to our members than we have been in the past.”
He wants the members – over 7,600 individual members – to really feel as though they own the institute. This year has seen member participation increase, and the organisation has had four times the usual number of board nominations and a boost in the numbers of entries into its annual competition. The institute’s social media engagement rates are also up.
Founded in the 1980s, the IIA SA is the largest industry body of its kind in Africa and provides leadership on the continent. The institute has memorandums of understanding with several African affiliates.
A vital role in the economy
According to the World Economic Forum’s (WEF’s) Competitiveness Index Report for 2017-2018, South Africa’s ranking of the quality of auditing and reporting standards has fallen to number 30. This is a stark contrast to six previous years where South Africa was ranked number one out of 140 countries.
The key pillars of the internal audit profession are to ensure good governance, controls and risk mitigation, provide quality assurance, ensure compliance as well as maintain the highest ethical standards possible. The internal auditor should act as an independent advisor to the company and report to the audit committee.
Investors, shareholders and the public depend on the accounting and auditing profession to provide a balanced and unbiased view of the state of companies and state institutions. “This is the best time to be an internal auditor. There is a much bigger appreciation of the profession and increased relevance when we are facing credibility challenges in both the public and private sectors,” adds Julius.
The professional conduct of internal auditors is guided by ethical codes set by the IIA SA. In South Africa, public sector and JSE-listed companies are required by law to appoint an internal auditor. This is, however, not enough to prevent auditing failures.
Julius believes that audit failures are nothing new: “There is no profession without an error rate. In a good economy companies can get away with much more. In a bad economy, these audit scandals are exposed.”
Julius has called for the profession to be given more teeth to fight corruption. Internal auditors often face intimidation from those involved in corruption within an organisation.
Technology in auditing
Julius looks forward to a time when he registers a robot as a member. He anticipates that emerging finance technologies will support internal auditors while also raising expectations. “With advancements in technology, more will be expected from internal auditors. The biggest trend I anticipate is that the predictive nature of the internal auditors’ work will increase. This means that they will not only be reporting on what has happened but identifying key risks of what is going to happen,” says Julius.
Julius points to the banks as leading the way when it comes to near real-time internal audits. “Internal auditors will quickly be able to assess whether a client is over-exposed with a bank loan offered. This means that this can be adjusted quickly, rather than becoming a burden for the client and the bank.”
He imagines a time when technology will be able to refer to documents outside of the organisation, such as flagging when an ID is fake.
A finance association pedigree
Before joining IIA SA, Julius was the acting executive for members and global alliances at the South African Institute of Chartered Accountants (SAICA). Prior to joining SAICA, he was a senior manager at auditing firm Nkonki Incorporated. He is currently the chairperson of the Public Sector Audit Committee Forum and Anti-Intimidation and Ethical Practices Forum. He is a chartered accountant.
He believes in setting audacious goals: “If you can achieve your ultimate goal in a lifetime, then it’s not a big enough goal. Life is a relay; we are here to do our part and hand over the baton.”