Internal audit: Messaging matters | Commentary: Importers need strong controls on trade activity | Commentary: Stay compliant as electronic communications expand
October 18, 2018
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Top News
SEC: Public companies must strengthen cyberdefense
Investigations of nine public companies reveal many fail to adequately review and update accounting controls to protect against cyberfraud, the Securities and Exchange Commission said in a report. Manipulated or spoofed electronic communication is a growing problem, especially for firms that do business with foreign entities, the report said.
Pensions & Investments (free access for SmartBrief readers) (10/16) 
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Your guide to integrating work papers with audit management.
Working papers are fundamental to the audit process. However, many auditors still consider the preparation of work papers separate from audit project management. This white paper explores common issues with traditional work papers--and how to overcome them so you can close the Audit Performance Gap and bring strategic value to your organization. Download your whitepaper >>
Internal Audit Watch
Internal audit: Messaging matters
Internal audit: Messaging matters
Pelletier (The IIA)
"At the core of internal auditing is our ability to communicate our work in a way that excites people to initiate positive change," writes Jim Pelletier, IIA vice president of standards and professional knowledge. "Unfortunately, that's more difficult than one would think."
Internal Auditor online (10/16) 
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Commentary: Importers need strong controls on trade activity
Trade tensions and subsequent tariffs between the US and China have resulted in some goods from China being transshipped to countries such as Malaysia, Vietnam, the Philippines and Sri Lanka, where they are relabeled with a new country of origin before they reach the US, and vice versa. This illegal activity is a crucial reason for importers to maintain strong controls to ensure compliance with customs laws, writes Brian Peccarelli of Thomson Reuters.
CFO (10/12) 
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CFIUS compliance vital to foreign deals
When considering a transaction subject to CFIUS review, getting ahead of CFIUS requirements is essential. We understand both CFIUS and proposed FIRRMA requirements, are approved to work with and report to CFIUS. We can assist both foreign acquirers and U.S. companies. Preparation will pave the way for a smooth process, if handled proactively.
Risk & Compliance
Commentary: Stay compliant as electronic communications expand
A survey found that younger generations prefer texting to talking on the phone or in person, and financial firms must guard against the risks that emerge as they seek to accommodate such preferences in their communications, writes Mike Pagani of Smarsh. They need to have a formal policy that forbids communication via certain electronic channels, conduct appropriate oversight of the electronic channels that employees use for their work, and use an archiving platform for record retention.
Financial Executives International Daily (10/16) 
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Commentary: Companies face regulatory risk from social media use
High-profile examples involving Martin Shkreli, who was convicted of fraud, and Tesla's Elon Musk, who reached a settlement with the Securities and Exchange Commission, illustrate the risks associated with social media communication, Roomy Khan writes. The SEC has offered guidance about the disclosure of Regulation FD material information via social media, and the accuracy of information in company managers' posts is a big concern, Khan writes.
Forbes (10/16) 
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SEC: Boards can depend on compliance chiefs' reports
The Securities and Exchange Commission says in a no-action letter boards of mutual funds can rely on reports from chief compliance officers to approve cross trades and deals with affiliates. The letter effectively reverses an earlier position.
ThinkAdvisor (free registration) (10/15) 
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Does a disrupted IA function mean a stronger strategic partner?
Although no one can predict the future, the rapid pace of change suggests there is one certainty for all organizations: the status quo is no longer acceptable. As the risk landscape continues to change, companies must direct attention to risks arising outside of their organization. IA needs to keep pace with these changes to stay relevant and provide strategic insights.
Fraud & Ethics
Expert roundtable discusses fraud in financial industry
As technology advances, so does the opportunity for fraud, although artificial intelligence and other emerging technologies can help fight the problem, experts say. AI, however, is "is only a part of the solution," and employees need thorough training and education to keep fraud in check, lawyer Hannah Laming says.
Financier Worldwide magazine (11/2018) 
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6 Hot Topics in SOX & Internal Controls for 2019
Find out what compliance experts think about the year to come. As discussed in a recent Workiva webinar, these six hot topics are sure to change the trajectory of the SOX and internal controls world in 2019. Download this quick, actionable white paper to learn what will be top of mind for risk and compliance professionals in the coming months.
New cyberscore aims to gauge business cybersecurity
The US Chamber of Commerce and FICO have developed a system to provide scores on the extent to which businesses and sectors have secured their networks. The Assessment of Business Cybersecurity score is based on a range of factors, such as the degree to which networks are exposed to the internet.
The Hill (10/11) 
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Surveillance of employees involves positives, drawbacks
Many surveillance tools are available for companies that want to monitor their workers. An argument in favor of such technology is that it can make workers more productive, but critics say it can heighten stress and imply that the quality of work is less vital than the quantity that gets done.
The Atlantic online (10/15) 
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The age of automation is here
And with it comes opportunities for integrating advanced technologies into internal audit (IA) functions. Adopting automation in internal audit, provides insight into the benefits of automation in IA and the important steps IA functions should consider as they prepare for a thoughtful, progressive deployment.
Professional Development
The role of humility in leadership
Good leaders are ambitious enough to drive companies to meet goals but are humble at the same time. Effective leaders recognize that their job is to uncover the best ideas, no matter who has them.
Harvard Business Review online (tiered subscription model) (10/15) 
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Transforming internal audit through critical thinking
Critical thinking is many times a cultural shift for internal audit. It can deliver the value creation being sought, and expand or develop the positive perception of the department across the organization.
IIA News
Pulse of Internal Audit survey closes tomorrow
It's the last opportunity to provide input on topics important to the internal audit profession, including cybersecurity and data privacy, board and management relationships, emerging and atypical risks, and use of third parties, for the 2019 North American Pulse of Internal Audit Survey. The survey closes Oct. 19.
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An Oversight in Our Oversight
When it comes to improving internal audit performance, the things audit committee chairs hesitate to say are often the things that audit executives most need to hear. Read the latest Tone at the Top. Download a free copy.
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When small men begin to cast big shadows, it means the sun is about to set.
Lin Yutang,
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About The Institute of Internal Auditors
The Institute of Internal Auditors (IIA) is the internal audit profession’s most widely recognized advocate, educator, and provider of standards, guidance, and certifications. Established in 1941, The IIA today serves more than 190,000 members from more than 170 countries and territories. The association’s global headquarters are in Lake Mary, Fla. For more information, visit
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