Singapore Standards of Auditing 200 (SSA) Summary

SSA 200 Summary

This SSA concerns the responsibilities and objectives of the external auditor when conducting an FS audit.

The purpose of an audit is to express an opinion on whether FS is presented fairly, in all material aspects, or give a true and fair view in accordance with the financial reporting framework. There is no need to provide assurance on viability of business, efficiency or effectiveness of business processes or effectiveness of internal controls.

The auditor needs to obtain reasonable assurance (high level) about whether the FS as a whole are free from material misstatement, whether due to fraud or error. Audit risk (function of risk of material misstatement and detection risk) should be reduced to an acceptably low level. This is the risk that auditor expresses an inappropriate opinion when the FS is materially misstated. Note that reasonable assurance is not absolute assurance.

The auditor needs to apply the concept of materiality (FS and assertion level for classes of transactions, account balances and disclosures). Auditor is not responsible for detection of misstatements which are not material to the FS.

The SSAs requires the auditor to identify and assess risks of material misstatement (ROMM), obtain sufficient and appropriate audit evidence and form opinion on the FS based on conclusion from audit evidence.

If reasonable assurance cannot be obtained, the auditor should disclaim an opinion or withdraw from the engagement.

The management and those charged with governance are responsible for preparing FS in accordance to financial reporting framework, appropriate internal controls over financial reporting, provide auditor with unrestricted access to information for the audit.

ROMM comprises of two components, the inherent risk component (higher for complex transactions and those requiring accounting estimates) and the control risk (cannot full eliminate ROMM due to inherent limitations such as human errors or mistakes or management override of controls) component.

As per SSA, the auditor needs to comply with relevant ethical requirements (ACRA code related to audit of FS and Integrity, Objectivity, professional competence and due care, confidentiality, professional behaviour), exercise professional scepticism (critical assessment of audit evidence, looking out for fraud risks, looking out for reliability of evidence) and professional judgment (materiality, extent of audit procedures, evaluating management judgments, drawing conclusions based on audit evidence) in planning and performing the audit.

Auditors have to comply with all SSAs that are relevant to the audit. If there is a failure to achieve an objective, there may be a need to modify the auditor’s opinion or withdraw from the engagement.

As part of preparing the FS, management may need to exercise judgment and make accounting estimates which are reasonable in the circumstances.

Management and those charged with governance have to acknowledge and understand a set of responsibilities for accepting the audit engagement.

The auditor must be independent both in mind and in appearance. This is to enhance the auditor’s ability to act with integrity and be objective and to maintain professional scepticism.

Refer to SSA 220 for quality assurance and partner review requirements.

Detection risk relates to the nature, timing and extent of the auditor’s procedures that are determined by the auditor to reduce audit risk to an acceptably low level.

Some of the inherent limitations of the audit include information that is withheld by the management and complicated fraud schemes which is difficult for auditor to detect. Auditor is also not trained to authenticate original documents. The audit must also be performed within a reasonable time and cost. However, despite these limitations, auditor should not accept less than persuasive evidence.  

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IIA Magazine Feb 2016 Issue

This is the 75th year of the anniversary of the IIA.

Capturing the Moment. Experts from around the globe provide a snapshot of the profession, discussing key issues impacting IA. In the past, IA was more focused on hindsight, it is now more about foresight too. Often, some IA staff may want to move to other departments. It is critical to find a clear path ahead for IA. Some of them might just want to stay in the profession forever. There has a clear shift from compliance to risk based audits. It is also good to volunteer for the profession. Combined assurance is also becoming more widely used. Students should try to contact the industries and ask for challenging assignments on IA. IA should set aside a portion of their paycheck every month to attend training etc. Work objectives should be clear and there must be clear communication. IA can also provide assurance on the management of strategy risks. IA can also add value to process effectiveness.

A Career on Point. There are many more women in this profession. IA has matured and many have viewed this function more positively now. To some, IA seems interesting and challenging. It is good as it helps you prepare for a leadership role.

Expanding the Foundation. Required audit competencies have changed considerably over the years, placing more and more emphasis on technology, business acumen and soft skills. IA is now a very respected profession. Effectiveness and efficiency are the hallmarks now. Information has increased over time and data analytics is being used more frequently nowadays. Soft skills and business acumen are very important too. Nowadays, it is good for IA to possess leadership capabilities and strategic thinking capabilities. There is a need for long-term adaptability, continuous learning etc.

Changing with the Profession. The IPPF has a history of adapting to meet stakeholder and member needs. They often listen to the needs of the profession. Now, the framework is more broad and flexible in its approach. The Standards are separated into attribute, performance and implementation types.

Twenty-first Century Milestones. Over the last 15 years, several watershed events helped define the practice of IA. IA is never dull. The first is flagrant financial reporting fraud, with cases like Enron etc. IA cannot ignore controls over financial reporting. The next is financial markets meltdown. The dotcom crash and the subprime crisis wreaked chaos throughout. ERM grew in stature as a result of all these meltdowns. The 3 lines of defence is all the more important in recent times. The next 2 big issues were cybersecurity and bribery and corruption.

The Perception of Value. A comparison of 2 IIA studies suggest internal audit may still have a long way to go in delivering stakeholder insight. Most IA are not meeting stakeholders’ expectations. Sometimes, there might be a lack of general management or operating insights within IA. Sometimes, IA also does not consult departments when developing audit plans.

Where We Are. Today’s IA enjoy greater stature within the organization and are working to meet ever-increasing expectations.

A Steady Progression. Audit professionals are in demand. IA needs to shape management’s expectations of them. IA should market themselves more. Cross-training and gaining exposure from other departments is the key. Auditors must be well-rounded and learn to take personal responsibility.

Conformance to the Standards. The top 10 non-conformance issues are: 1) Internal assessments; 2) reporting on the QAIP; 3) recognition of the definition of IA, code of ethics, standards in the IA charter; 4) external assessments; 5) QAIP; 6) requirements of the QAIP; 7) Engagement work program; 8) purpose, authority and responsibility; 9) co-ordination; 10) communication and approval

The ‘Anti-Fraud Moment’. Fighting fraud demands more than just awareness. There needs to be meaningful training when it comes to learning of skills. There is little training on red flag indicators. Create simple articles to share with employees. Record 5 minute training videos. Take advantage of live formal and informal skills training opportunities.

How Much Do Risks Really Change? The risk landscape shifts radically from 1 year to the next. It can changed a lot in 75 years. Global events can rock the market and commodity prices etc. Tech breakthroughs happen fast and world events disrupt things. Regulations change as well.

Internal Audit Fundamentals. The most basic skills remain largely unchanged. Critical thinking and communication are the key. Co-sourcing is an option when IA lacks certain technical skill sets.

Around the Globe. IA around the world are providing value to their organizations in a wide variety of ways and at different levels of complexity and sophistication. The role of IA may not be well-understood. Value demonstration is the key. Different auditors will be at different levels of proficiency and maturity.

Industry Roundup. The challenges IA face today are many and vary by sector. Public sector audit has moved beyond compliance or financial audits into performance auditing. There is also emphasis on effectiveness. There are sophisticated products in banking and safeguarding information is one of the key objectives. Money laundering is also a key area to watch. As for health care, there are issues like quality of service, compliance, data security are all big challenges.

A Different Perspective. IA’s business partners offer their views of the profession. Audit can identify opportunities for improvement throughout the organization. It is important to have a sharing environment. Technical skills matter a lot nowadays. IA should look at areas that management struggle with. IA should not hide or mask problems from management. Being able to understand IT etc would make IA more valuable.

Educating Auditors. Determining what IA students need to know now is a constant challenge. Being skilled in IA is a unique skill that is useful. It is possible to simulate real-world IA case studies for students. IA needs to be intellectually curious to learn more. One cannot speed up experience as time is required.

IA Future. IA allows one to understand the business. Do not miss the change to meet senior leaders.

‘I realized the role of IA aligned with many of my interests. I wanted to add value and bring a positive impact to a business while understanding how it operates, and IA presents opportunities not found in other roles within the company.’

IT Audit Trends and Foresight. Technology will continue to bring new risks for organizations. IA need to address the IOTs. We need to understand the inventory of devices and the type of data that is collected. One needs to understand the value of digital strategy.

The Changing Business World. Auditors can anticipate future developments by looking beyond their organization’s current business situation. Africa is going to grow fast in future. Businesses need to create space to think. IA needs to be able to anticipate new risks. IA can follow current affairs. Talk to customers to see how their needs are changing. IA is really looking to delight people.

Five Trends. Top global IA thinkers take a broad look at key issues that will shape the profession. The world is changing fast and risk are interdisciplinary. New risks must be understood and evaluated. IA can learn new ways of analysing and also develop strategic foresight. The compliance scope is continually expanding and making things more difficult. IA needs to link compliance activities to upstream processes and control improvements. It will be a challenge for lower the cost of compliance. Stakeholders are more demanding nowadays. IA must have knowledge of the various industries and any new business lines. Technology risk is getting more complicated. Data is becoming more prevalent and data analytics is getting more useful than ever before.

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Reasons to Stay Alive by Matt Haig

I didn’t believe that I would survive after contracting depression 13 years ago. There didn’t seem to be light at the end of the tunnel. However, it is real and people do suffer from it. Often, I felt that I was largely alone and no one else could understand what I was going through. The solution to overcome depression is to speak about it openly. Time can heal things and words can set you free.

The Day I Died. I suffered from depression from about a year when I was 24. My great-grandmother committed suicide previously. Life was so bad that I contemplated suicide. Even my appetite was affected. This was an existential horror. I literally attempted suicide.

Death was something that scared me. And death only happens to people who have been living. There were infinitely more people who had never been alive. I wanted to be one of those people. That old classic wish. To never have been born. To have been one of the three hundred million sperm that hadn’t made it. – Matt Haig

Why Depression is hard to understand. It is invisible. Your troubles seem to be never-ending and tormenting. It is mysterious in nature and anyone can suffer from it, even comedians.

A Beautiful View. I wanted to attempt suicide when I was holidaying in Spain. I did manage to walk to the edge of the cliff. A depressed person doesn’t want to feel happy, they just want to be freed of pain. My loved ones didn’t know what I was going through. I decided not to take my life.

I think life always provides reasons to not die, if we listen hard enough. Those reasons can stem from the past – the people who raised us, maybe, or friends or lovers – or from the future – the possibilities we would be switching off. – Matt Haig

Pills. My doctor advised me to take pills, even though I didn’t want to. Even after medication, I still felt that I was divorced from reality and a sense of panic was still within me

Killer. Suicide is becoming increasingly common and it is very scary indeed. Some people underestimate the effects of depression.

Negative Placebo. I tended to drink too much when I was not anxious. Diazepam seems to increase my panic levels. To me, the drug was the problem.

Feeling the Rain without an Umbrella. We are made to believe that medication can work all the time. To me, sleeping pills were more effective than anti-anxiety medication. In reality, many people cannot do without pills like Diazepam. There are professors who believe that there are other ways to counter depression other than drugs. Examples could be intervening and recognizing when we are in a low-mood state.

Life. I didn’t get along with my ex-colleagues. I felt out of my place when hanging out with them. I quitted the job and thought that I was a failure in life.

Infinity. Normally, people only think about one thing at once so as to simplify things. However, depressed people think about hidden stuff.

The evolutionary psychologists might be right. We humans might have evolved too far. The price for being intelligent enough to be the first species to be fully aware of the cosmos might just be a capacity to feel a whole universe’s worth of darkness. – Matt Haig

The hope that hadn’t happened. It felt better seeing my parents smile. I returned to where I grew up as a child. I seemed okay for now.

The Cyclone. Depression felt like a weight, both a metaphorical and emotional one. I felt trapped in a cyclone.

My symptoms. There were many different types of symptoms at play here. The warning signs were all present. I kept thinking that I was going through this alone.

But with depression and anxiety the pain isn’t something you think about because it is thought. You are not your back but you are your thoughts. – Matt Haig

The Bank of Bad Days. You store memories of bad days but you always remind yourself of worst days.

Things depression says to you. Depression will tell you to continue staying in bed. It will tell you that everyone will be dead eventually. It will tell you that tomorrow will be worse than today.

Facts. I craved for knowledge. Many people are not open or acknowledge that they have depression. Men are three times more likely to kill themselves as compared to women. Depression is becoming more common and it is scary.

The head against the window. I thought it would be better to be the 80 year-old on the street as compared to my own current identity. The tears came from my stomach. My dad cried too. Crying can be contagious sometimes.

From the outside a person sees your physical form, sees that you are a unified mass of atoms and cells. Yet inside you feel like a Big Bang has happened. You feel lost, disintegrated, spread across the Universe amid infinite dark space. – Matt Haig

Pretty Normal Childhood. People with depression may have mental illnesses in the past. However, I was often anxious when I was younger.

A Visit. I realized that I had a phobia for tight places.

Boys don’t cry. Men are more likely to kill themselves as compared to women. Why is that? Most men see mental illness as a form of weakness. Often, they don’t like to seek help. Learn to accept that depression is a human experience after all.

It took me more than a decade to be able to talk openly, properly, to everyone, about my experience. I soon discovered the act of talking is in itself a therapy. Where talk exists, so does hope. – Matt Haig

Landing

Once the storm is over you won’t remember how you made it through, how you managed to survive. You won’t even be sure, in fact, whether the storm is really over. But one thing is certain. When you come out of the storm you won’t be the same person who walked in. That’s what this storm’s all about. – Haruki Murakami, Kafka on the Shore

Cherry blossom. You become obsessed with how your brain functions. I wished I could be a blossom that floated away from a tree. Depression is a mysterious illness.

Unknown unknowns. The brain is incredibly complex. Depression is not about chemical imbalance. It could be due to the lack of serotonin. However, there are also research which point to other directions. Neuroscience is constantly improving. However, the human brain hasn’t evolved from years ago. Our cognition ability hasn’t improved from the past. Exercise does help you to feel better about yourself.

The brain is the body –part 1. When you are depressed, your body feels it too. For instance, you suffer heart palpitations, aching limbs, sweaty palms etc.

Psycho. I realized that I talked in my sleep when I was younger. I had many troubles and worries when I was a kid.

Jenga Days. Time passed extremely slowly when I was 13. A week seemed like a voyage.

Warning Signs. Depression is essentially an illness. It is often invisible. One might feel fatigued for no particular reason. Other symptoms could be loss of appetite, irritability, crying episodes etc.

Demons. I imagined a demon licking me when I closed my eyes. The more I tried not to think of it, the more it appeared. I couldn’t get rid of it at all.

Existence. It is not easy to not think that life is hard. This is the human condition. Humans have created remarkable things in their lifetimes. However, life is sweet even though we know that nothing lasts forever.

Life is hard. It may be beautiful and wonderful but it is also hard. The way people seem to cope is by not thinking about it too much. But some people are not going to be able to do that. – Matt Haig

Part 3: Rising

The art of walking on your own. Depression is often associated with anxiety issues. I forced myself to walk into situations alone. Although I was scared, I told myself that it would be ok. Even walking to the shop alone was incredibly scary for me. I told myself that it was just a shop. I had trouble standing still after purchasing something. It is never easy for a depressive to perform even simple tasks.

A Conversation Across Time – Part 2. I kept telling myself that I could do it. I made it to the shop. I realized that I needed to give myself reasons to stay alive.

Reasons to Stay Alive. Many other people have been here before and been in your shoes. Things are only going to get better from here. The pain won’t last forever. Hurricanes will run out of energy someday. Tell yourself that life will be worth it. There will be happy moments again.

You hate yourself. That is because you are sensitive. Pretty much every human could find a reason to hate themselves if they thought about it as much as you did. We’re all total bastards, us humans, but also totally wonderful. – Matt Haig

Your mind is a galaxy. More dark than light. But the light makes it worthwhile. Which is to say, don’t kill yourself. Even when the darkness is total. Always know that life is not still. Time is a space. You are moving through that galaxy. Wait for the stars. – Matt Haig

Love. No matter how much you love, you will never be free of pain. Andrea saved me. We have been together for 5 years. Love is being able to do weird stuff with another person and be yourself fully. I was lucky. When depression hit, Andrea was always there for me. I could always talk to her. She covered for me.

How to be there for someone with depression or anxiety. Understand that your presence matters. Listen. Educate yourself and realize that depressives can’t do simple tasks. Learn to be patient and ask them what can you do to help.

An Inconsequential Moment. I thought about work. It was a neutral thought. It was massive progress for me.

Things that have happened to me that have generated more sympathy than depression. There were a lot of other things.

Life on Earth to an alien. Explaining depression to someone not suffering from it is like explaining life on Earth to an alien. It can be very intense. It is your life. Everything is magnified in intensity. Even minor changes in weather seem massive to you. It is like a sharpening of the senses.

White Space. I liked the white space. Light was everything. I started to pick up reading. It was good that I fell in love with reading all over again. Words are the escape route. Books were the way out for me.

There is this idea that you either read to escape or you read to find yourself. I don’t really see the difference. We find ourselves through the process of escaping. – Matt Haig

The Power and the Glory. I read ‘The Power and the Glory’ by Graham Greene. I loved his works. There was something which I could relate to. There was hope of redemption at the end and it was inspiring. Some of the other books which inspired me were ‘The Outsiders by S.E. Hinton’; ‘Letters of Keats’; ‘Oranges are not the only fruit by Jeanette Winterson’; ‘Money by Martin Amis’; ‘The Diary of Samuel Pepys’.

Paris. I was afraid of travelling and felt a panic attack coming back. I was afraid of saying no as it made me seem like a loser. Eventually I went and realized that things were not so bad. I confronted my fears calmly. Travelling gives you perspective and solution. Travel has since become one of my favorite things to do.

Reasons to be Strong. I needed to be near Andrea. I had to be strong one after I realized Andrea’s mum had cancer. It was horrible having to wait for her mum in hospital. However, eventually, they returned and I was okay again. Later, I challenged myself and eventually got a book published. I dedicated the book to Andrea.

Weapons. I was going to be a published author. My self-esteem was boosted massively. I knew that wellness was possible.

Running. Running was a great alleviator of depression and anxiety. It was difficult but that only motivated to work harder and train more. It undid the damage from smoking and drinking. Murakami loved to run too. It really helped to train the mind. My weapons against depression were writing, reading, talking, travelling etc.

The brain is the body –part 2. Mental illness leads to other ailments too. Derealisation is a symptom that makes you feel well, not real.

Famous People. Even famous people like David Foster Wallace and Robin Williams took their own lives. Depression can happen to just about anyone. Being overly attached to material items can lead to greater suffering. Depression makes us think too much.

Abraham Lincoln and the Fearful Gift. He wanted to accomplish something in his lifetime. He insisted in acknowledging his fears and delve deeper into them. He was one of the most serious men around. Depression was something Churchill had but that inspired him. The motivation behind ‘The Scream by Edvard Munch’ was also existential terror. Franz Kafka was also a depressed person. Melancholy fueled Lincoln’s great work.

I find that being grimly aware of mortality can make me steadfastly determined to enjoy life where life can be enjoyed. It makes me value precious moments with my children, and with the woman I love. – Matt Haig

Part 4: Living

The World. If everything was happy and great, why would people need anything more? However, it is important to be calm and learn to settle.

Life is the people who love you. No one will ever choose to stay alive for an iPhone. It’s the people we reach via the iPhone that matter. – Matt Haig

Mushroom Clouds. It is easy to ignore warning signs. Now, I know what to look out for. I had to give a speech in public in school and I felt incredibly nervous. A rash broke out around my skin. I experienced a panic attack but managed to finish my presentation.

The Big A. Anxiety and depression co-exist like a nightmare marriage. We are all overloaded by information in the modern world. Do we all have to live with anxiety?

Slow Down. It is important to learn to slow down. We can use CAT and MRI. Neuroscience isn’t perfect yet. Pills might not be the only cure too. Yoga is good at helping you to slow down. Take deep breaths. Learn to meditate and let the tension go. Always live in the present.

Parties. It is difficult to walk in a room full of people. I hated parties. My panic episodes seemed to be entering relapse. I ran to Andrea. Thankfully, after I left the party, the panic attacks subsided. Failure can be a step forward.

Part 5: Being

Fighting makes it worse. I learn to accept depression and anxiety. Now, I am simply glad to be alive. I want to experience as much of life as I can. I want to feel as much as I can.

I feel the sheer unfathomable marvel that is this strange life we have, here on earth, the seven billion of us, clustered in our towns and cities on this pale blue dot of a planet, spending our allotted 30,000 days as best we can, in glorious insignificance. – Matt Haig

How to be a bit happier than Schopenhauer. Schopenhauer thought that life was about futile purposes. He thought that achieving goals only brought a short satisfaction. Unattained goals cause pain. Even if you achieve your goal, you will need to set another one and the process continues on and on. The solution is to give things up. His solution was to lead a very unambitious life and deny their instincts. How do you stop wanting and worrying? How do you get off the treadmill once and for all? The answer is acceptance. Buddhists believe in mindfulness. It is important to connect with the Universe and meditate more. It is important to grateful and compassionate. One should be selfless and mindful.

We all matter because we are all alive. And so kindness is an active way in which we can see and feel the bigger picture. – Matt Haig

Thoughts on Time. We all fear death. Time does seem to travel at different speeds. Being aware is important. How much are we living in the present? We think that life is short so that we need to achieve as much as possible. However, by doing so, it seems that time will pass too quickly. We all have to accept how small we are in this world.

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Dating Tips 202

Online Dating by Remi Kapler

Cheat Codes of Love. This book has tips on how to succeed in online dating. Finding time to scour different venues like bars etc may be too tiring. There is no fairy tale in romance. One way to meet people is to use online dating. There are benefits to online dating. If your offline dating is futile, do consider online dating. There is no loss.

Internet Dating 101 – A Tell-All Guide. Learn to decipher online dating. Technology may be able to help you connect with more people. It is human nature to seek romantic relationships. Technology is trying to make things more convenient for everyone. What are some of the pros and cons of online dating? There will always be risks and horror stories associated with online dating. Although there are scams, have faith that everything will be fine. Some of the pros are: 1) no more late night visits to the singles bar. Even if you scout at a bar, your chances are minimal at best. Girls in a bar are also rarely serious in how they act. 2) Online dating offers good variety. Your aim is to find love. At a bar, usually, it sends up with sex on the first date and this spoils the whole relationship from this point onwards. There is no alcohol involved in online dating, so it is much healthier and safer. 3) In offline dating, you don’t know who you will get, whether she is attached or whatever. Online dating is better as you can filter by criteria. This ensures that it is not a pure shot in the dark. 4) Great First Dates. If you have chatted with the person beforehand, there is a high chance that the date will be a success. You will also not feel as nervous as meeting a complete stranger. Now, we need to look at the cons as well. However, it is possible to mitigate the cons. 1) Internet Scammers – these are people with fake profiles. Dating scammers get close to you and want some information from you in the end. It is important to be wary of such people. He might want things like money, gifts from you. The scammer will often claim to have a medical emergency, requiring fast cash. Do not fall prey to those scammers at any cost. Watch out for tell-tale scamming signs. A scammer will often say things that are not consistent with their profile. Do not tempted to send personal information. Always meet at a public area. 2) Many people fall prey to the ‘shopping mentality’ for dating. This indicates a lack of commitment to take things further. 3) Your personal data belongs to the app and might be taken away from you in a lawsuit etc. 4) There might be security issues/misrepresentation on the apps.

Most online dating platforms make it easy to specify your exact needs and sieve everything not meeting your criteria. This removes the guessing bit and wild guess aspect of dating. Further, before you get to interact with matches’ before you go on the first date, you get an ideal chance to decipher whether someone is worth the trouble of a date or not way before you plan the first date. – Remi Kapler

Your Quest for Online Love Starts Here. There are many specific sites for exactly what you are looking out for. Find the one that best suits your needs. OkCupid and Tinder are the 2 most popular apps/websites around. Tinder is the new type of dating. Decide what type of relationship you want. This is really very important. You must answer them truthfully. Always be honest with your dates and learn to be vulnerable. Do not lie about your profile. Exercise patience. Do not pass off judgment too quickly. Tinder is one of the best dating apps around. It is also easy to use. As it is an image driven app, it is important to have a good clear photo of yourself. It should show you having fun and enjoying yourself and showing how awesome your life is.

How to create a beautiful outstanding online dating profile? Choose your username prudently. Be creative and come up with an interesting name. Be cheeky and let your personality shine through. Hook them with your headline and bio. Use an inspiring quote. After reading, someone should feel a sense of excitement. Write your profile in as little words as possible. Avoid using the words ‘I’. Make your profile stand out with your likes and activities. You will definitely want to sell yourself. You will definitely want to appear different and unique. Let the picture do the talking. Avoid bathroom or mirror selfies.

Your Boot Camp Guide to Online Dating Profile Photos. Your photos matter a great deal. Ensure all the pictures of yours are of similar standard. More is better. Try not to crop photos and others can tell. Try to show your left side of your face. Ensure a full length photo. Apply the three shot rule.

The three shot rule states the following: One of your profile images should have you looking straight at the camera and smiling. The second should show you engaged in something you like to do for fun. The third shot should show off your personality, whom you are as a person. – Remi Kapler

The Icing on the Cake – Going All-Out. Learn how to filter your matches and find the ideal love partners. Understand that some matches will click and others will not. You will need to learn how to open up conversation. Create a strategy of who you want to look out for. Keep a scoring system of those traits. Create curiosity from your profile. The best way to start a conversation is to find a common topic. Avoid dirty jokes that will make you seem perverted. Use correct grammar and avoid net speak. Simple, short and sweet works best. Answer a message in the same tone in which you received it. The next step, how should you plan your first date? As soon as you are comfortable with the person, ask the person out on a date. Just think of it as any other first date. Meet at a public area. Always prepare for anything good or bad as the first date may not go according to what you expected.

Your profile should not be a tell-all stop sign; you should leave room for some curiosity, or what we call creating a curiosity ‘gap’. Offer just enough information to inflame a curiosity that compels the ‘right’ matches to reach out. – Remi Kapler

The best way to start a conversation with someone you really like is to find common ground, make a comment about that, and immediately after, ask a question. Nothing makes someone, stranger or otherwise, experience the ‘you care’ emotion faster than a well-thought out question. – Remi Kapler

Ideally, your first message should make a simple introduction, highlight your interest in the person through a comment about something you have in common with that person, and a sign off with your name. This should amount to a few lines of text. The trick here is to leave him or her wanting and yearning for more. – Remi Kapler

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IIA Magazine Apr 2016 issue

Soft skills seem to be lacking in some of the IA teams. There is the art of interviewing that must be executed properly. IA can set aside time to work with other parts of the business. Audit reports are not the only communication channel.

Time to Shift the Mindset. Pulse report urges IA to focus on culture and cybersecurity response. Board members should discuss with management to ensure that there is a common understanding. There is a risk of poor vendors and that firms could suffer from reputational damage. There needs to be strong third party risk practices.

Fraud Prevention. An effective control environment can deter or minimize the occurrence of fraudulent activities. Internal controls may not always be designed to prevent fraud. There must be a strong control environment for fraud prevention. Background checks and fraud related training can be useful indeed. Whistle-blowing hotlines can be set up. A certain level of anonymity must be ensured. No one person should complete control over a whole particular process, from start to end. Monitoring activities should take place on a frequent basis.

The Call no CAE wants to receive. A strong working relationship between IA and the CIO is essential to responding quickly to a cyber incident. This is important as cyber attacks can lead to reputational damage. One can verify the controls at the vendor and get them to fill up a data security risk assessment questionnaire. IA can be the trusted advisor that an organization needs.

Collaborative Risk Management. As organizations consolidate their risk processes, IA may not be able to continue to stand alone. Risk collaboration and organizing risks are more important nowadays. There is a need to be efficient about going about this. Risk needs to be organized neatly. ERM is one way to link everything together. Auditors should be open to other ideas on organizing and mitigating risk.

The Ticking Ethical Time Bomb. The financial loss from theft was secondary to the effect on company culture. Sometimes, the most obvious issue is no the more important one. Small frauds can lead to large ones. Reinforcing identity is also very smart sometimes, as it can help with ethical reinforcement. Increasing controls should not be done as a knee-jerk reaction sort of thing.

A Matter of Trust. Attention to detail and focused effort can help IA build the relationships required to be perceived as valued advisers. IA should be given time to innovate, gain an understanding of evolving challenges and talk to people in the business regularly about the issues they face. You help to build trust if you know what the regulators or other people are doing. Sometimes, top management might even tell CAE the problems that are upcoming. Relationship building and being part of the management team is crucial. However, there is still a need to be independent even if IA is like a trusted advisor. Try to leverage on technology.

‘IA can often be forgotten if it is not part of the core team, because it is less visible than those functions that meet and talk regularly.’

‘Auditors are there to make organizations better – it is a key part of the way they can add value. Not commenting when they see a better way to do something could show a certain lack of moral courage.’

Proactive Fraud Analysis. Integrating advanced forensic data analytics capabilities can help auditors mitigate fraud risks and demonstrate returns. IA can invest in such tools as it can help in the monitoring of risk. IA should ask ‘What are the high risk accounts?’; ‘When?’; ‘Where?’ etc. IA should focus on the low-hanging fruit first. The first project undertaken should be easy. Learn to go beyond the descriptive analytics. Learn to embrace both structured and unstructured data. Communication is the key. It would be good to automate the tests and involve the end-users. Also, learn to set a realistic timetable. Keep analytics simple and intuitive – don’t include too much information in one report so it isn’t easy to understand.

Getting More from Interviews. Instead of emphasizing formalities, IA should approach each interview like a conversation. You can gain insight into the way operations work and identify gaps etc. Plan your questions beforehand and be prepared. However, the less formal it is, the more information you can find out from the interview. Try to make it a conversation. Learning about the auditees’ life can help to build rapport and build the bond. Talk to others within the auditees’ same department. The interview’s purpose should be specific, attainable and outcome oriented. Preparing for the interview helps a lot. The location matters as well. Try to open in a way that makes the auditee at ease. Try to explain the purpose and the outcome of the interview. Learn to practise effective listening. One can ask thought provoking questions that will help to elicit information. Learn to practise active listening and show positive body language such as being attentive. You can prepare questions but there is no need to follow to a list strictly. It can be difficult to build rapport. Do not try to tell the interviewee that the interview must be done to complete the audit. Have lunch with auditees once in a while. People love to hear about themselves.

‘Auditors should be curious about the way processes work, the way the organization works, and perhaps most importantly, the people who make it work. Curiosity will lead to a better understanding of the organization, better ideas for improving the organization, and a better rapport with the individuals within the organization.’

On the Hunt for Payroll Fraud. Taking a close look at payroll risks can enable IA to help their organizations save money and identify wrongdoing. Payroll fraud is more common if there is irregular workforce patterns. Payroll is usually shrouded in secrecy. Overpayment is more common than underpayment. IA can also examine to seek actual cost savings/ productivity gains. IA can adopt a helicopter overview of payroll data and the payroll process. One can compare payroll costs with other organizations. Rosters should be designed to optimize the allocation of employees to operational needs. Management welcomes findings that reveal specific wrongdoing because they provide hard-to-dispute evidence. IA can look out for certain insights and then drill further. There are many common findings. The audit fieldwork needs to be well-researched and planned.

Guardians of Integrity. IA can provide insight into corporate identity and people-related risks. For instance, IA can evaluate the ethics and organizational integrity. IA must communicate with the board and management and be the corporate conscience. Testing the effectiveness of the ethics programs can be tough. It is important to understand how an organization defines success. It is important to uphold the code of ethics: integrity; objectivity; confidentiality; competence. IA should examine incident reports too. IA must be as wise as the board, as savvy as management, and as shrews as attorneys. Stakeholder surveys could be used to understand the management and employee ethics. IIA needs to exercise fair and ethical decision making.

Internal-Audit

audit financial company tax investigation process business accounting

IIA Magazine Aug 2017 issue

The Technology Issue

 A technology revolution. Tech is moving at a fast pace and some businesses may not be able to reap the benefits. IA needs to understand the evolving risk landscape related to the business. Tech will continue to disrupt the landscape and IA needs to reassess what data means to them going forward. Auditors help organizations avoid getting into trouble by identifying issues early and avoid them being surfaced by regulators or the media.

The Cyber Readiness Gap. Organizations may not be prepared for the attacks they are expecting. Ransomware is a big issue and thinks will get worse. Only half the organizations surveyed have a plan to address ransomware attacks. IA can help to scrutinize cybersecurity practices and plans. IT security governance needs to include the human factor in corporate risk analysis and assessment. IA can move from a supportive to front-seat role when building crisis-resilient culture.

More than Compliance with ‘A’. Transforming a compliance program into a value-adding activity starts with IA. Compliance with AML regulations are important. However, many managers do not see value in compliance work. IA needs to ensure compliance can provide real assurance. It is important to do the right thing and do things correctly. Ask yourself why there is a compliance requirement in the first place. IA needs to work with the first and second line of defence to ensure all risks are being addressed. IA should also question the need for, existence of, and adequacy of compliance with A. Sometimes, the original risks may not be present and hence the compliance requirement should not be relevant. One needs to examine the adequacy and effectiveness of the mitigating control. The audit needs to maximize the use of resources and analytics. One can use trend analysis to understand whether risk is increasing or decreasing. Effectiveness of controls can be tested with analytics.

‘But it should not be compliance simply for compliance sake. Internal audit should consider the overarching business objective and the controls that help mitigate risk to the achievement of the objective – even when examining compliance-related controls.’

Stop Clicking, Start Coding. SQL queries can enable internal auditors to uncover greater insights from organizational data. Data needs to be analysed etc. Some auditors are required to learn SQL. It is a language for managing data held in databases. To be good, logical thinking and reasoning are important and necessary for coding. SQL can be tailored for auditing needs and for ad-hoc queries. SQL and other audit software can form a powerful set of analytical tools.

Internal Audit needs risk management too. Managing its own risks can improve the audit function’s performance and demonstrate that it practices what it preaches. One key risk of IA is whether the department is strategically positioned within the organization its objectives. Other risks are whether the department has enough staff, on assurance etc. Reputation risks are important too, and so is compliance risks. Operational risks are like the resourcing problems, annual audit plan etc. If audits are behind schedule by about a month, it needs to be highlighted as a red flag. IA can also do a risk control self-assessment to evaluate internal controls in place.

The Cashier Cash Thief. Mounting family pressures and opportunity cause a trusted warranty clerk to pocket payments from customers. IA must emphasize the importance of SOD and monitor any exceptions. Trend analysis would allow organization to detect fraud more timely. Routine audits are vital for all cash processes. Mandatory vacations and rotation of duties should have prevented fraud from happening.

In Safe Hands. Organizations must grapple with a host of issues when determining how to best protect their data and manage the way it’s used. In Europe, there is a General Data Protection Regulation that goes into effect in spring 2018. It is a stricter regulation than ever before. Firms need to obtain consent for data collected from individuals. IA needs to go back to the drawing board to strike a balance. Respecting someone’s privacy rights is actually a soft skill and needs a soft approach. Privacy controls need to be engineered into business processes. Businesses must be clear about what they need the data for. Many companies do not know where their data comes from and how it is used. IA can be a role model in innovation etc.

Great tech expectations. As technology becomes more integrated with business processes, auditors must raise their IT skills. New auditors usually have better skills than older ones. People with expertise in IT will be in demand. Those with experience in DA will have an advantage over those who don’t. Experience with audit-specific software is also a plus. Auditors need to have an understanding of the infrastructure and applications being used. New authors are not usually well versed in soft skills. IA needs to have a good understanding of flow, controls and governance. Determine the specialty skills needed. Maintaining the right mix of generalists and specialists is a key IT challenge. IA needs to have a training plan for the IT risk and controls. Training hours need to be tracked and there needs to be information sharing at every meeting.

Building a data analytics program. Six strategies can facilitate progress when starting or furthering an analytics program. Many functions suffer from pitfalls/ setbacks. The six strategies are (1) create awareness rather than a silo; (2) understand the data before investing in a tool; (3) plan sufficiently; (4) think big picture; (5) Partner with IT; (6) Take advantage of visualization tools for inspired reporting.

#PurposeServiceImpact. The IIA’s 2017-2018 Global Chairman of the Board J Michael Peppers encourages IA to unify around the three concepts in his powerful hashtag. Purpose, Service and Impact are important words for our profession. It is about the why we do things. We should help enhance shareholder value through our work. Service is basically walking the talk. It is important to establish credibility with clients. We are both change agents and educators and need to do the right thing. Volunteering is important and internal auditors should strive to give back to the society. Always try to make a positive difference. We need to understand the purpose of the organization.

‘The best and most successful internal auditors I know understand that internal auditing is more than just a job: it is a sincere effort to improve the lot of others, whether organizations or individuals.’

The Root of the Matter. Performing root-cause analysis requires that auditors recognize common myths associated with the process. Addressing root cause will prevent the issue from recurring. Complex problems may be due a variety of factors. There may not be a single root cause at times. Use the 5 Why techniques. Sometimes, two root causes can lead to one problem. Some brainstorming is required to address all the root causes. One can use the fishbone diagram and identify problems in different categories like: Man, Machine, Measurements, Method, Materials, and Mother Nature. One can also use scatter diagrams to pair cause and effect and look for relationships. Good recommendations in the audit report should address the root causes of a problem. However, IA should understand that RCA requires time and resources and the organization must weigh the pros and cons of doing it.

Seven Steps to Transformation. IA can assist management throughout the many stages of business change. The first is pre-implementation review. It helps management to identify problems at the planning stage. Ask yourself what is the best ERP project model for ERP packages? The other steps are process/controls analysis, In-flight reviews, IT and User Acceptance Testing and Output/Results testing. The last 2 steps are post-implementation reviews and comparison to project management reviews.

It’s only one word. Excessive audit report wordsmithing is often a disservice to the client – and the audit function. Let those who did the work have a say in the changes. Never make a change unless you can explain why that change is necessary. Otherwise, you are just changing for personal preference. Always explain the reasons for any change to the person who wrote the original drafts. Do not be too anal about phrasing as this will result in rewriting and delays and frustrations.

‘Far too often, the lead, manager, chief audit executive doesn’t like what is written and starts editing the audit report. The process often results in a report the auditor no longer recognizes and, in the worst situations, it says something the auditor never intended it to say.’

The Data Analytics Strategy. Adding analytics to the audit methodology requires careful change management. Funding and resources needs to be provided. Integrate data analytics requirements into the audit methodology. Look for quick wins if possible. Use a champion to lead the strategy. CAE must emphasize that analytics is good as it improves audit efficiency. Analytics can add value not just to fieldwork, but also risk assessment and planning. Data is also evidence and that’s what sells well.

From ratings to Recommendations. Behavioural psychology suggests internal auditors’ approach could benefit from more carrot and less stick. Audit gradings are hated by auditees as it sends a signal that they did something wrong and that things are really bad. The SDT (self-determination theory) shows that human motivation is optimized when the following 3 are present: developing one’s skills (competency); exercising free will (autonomy); feeling connected with others (relatedness). Give your auditee the chance by sharing about common goals and building good relationships with them.

auditing-service-singapore

The Art of the Good Life: 52 Surprising Shortcuts to Happiness, Wealth and Success by Rolf Dobelli (Part 4)

Managing Expectations (The Less You Expect, the Happier You’ll Be). Our brains are an expectation machine. Expectations are built without us knowing as well, on a subconscious level. Do not have excessively high expectations of certain events. If your expectations regarding income rise faster than your income, you will be disappointed. Besides feeding yourself, you don’t have to do anything else. There are very few true necessities in life. Learn to erase supposed ‘necessities’ from your life. It is good to have desires, but do not be shackled by them. Not all your desires will be fulfilled. Your preferences are sometimes out of your control. Try not to have expectations of others, as they are beyond your control. To live a good life, draw distinctions between necessities, desires and expectations. You need to keep them separate. Managing your expectations is part of a good life.

Research confirms that expectations have a profound impact on happiness, and that unrealistic expectations are among the most effective killjoys. – Rolf Dobelli

Sturgeon’s Law (How to Tune your bullshit detector). Sturgeon’s Law states that 90% of everything is crap, regardless of what field you are in. To re-phrase, 90% of intellectual things are bullshit. Knowing this is good, as you can filter what you see, hear or read without feeling guilty. Concentrate on being selective in your absorption of content. In life, you will come across a lot of trash, but you need to be able to tune those out. It is easier said than done. Recognize the difference between ideas and good ideas. If you’re not sure whether something is bullshit, it’s bullshit.

In Praise of Modesty (The Less Self-Important You Are, the Better Your Life will be). Even great people will be forgotten in 4 generations or so. The problem with humans are that we are too attached to a sense of self-esteem. Our ego is too big. To live a good life, avoid being too full of yourself. Avoid standing upon your ego too much. Focus on your work and do not brag. The self-serving bias afflicts those who have a big ego in life. They may also over-estimate their abilities in life.

In a hundred or two hundred years at the most, hardly anybody will know who Bill Gates, Donald Trump or Angela Merkel were. And as for the two of us – you, dear reader, and me – a few decades after we’re gone nobody will spare us a second thought. – Rolf Dobelli

Inner Success (Why Your Input is more important than your output). Magazines sometimes produce a list of the most successful and powerful people in the world. Modern societies highlight material success a lot. Why are there no lists for people who are the most satisfied? Definitions of success depends on the product of their time. Don’t follow others blindly. Material success is 100% a matter of chance. True success is inner success. Once you have achieved tranquillity of the soul, you will be able to put up with slings and arrows. You can control your input, but not your output. Inner success is more stable than external success. Take stock of your accomplishments at the end of each day. People desire external gain as it gives them internal gain.

Success is a peace of mind, which is a direct result of self-satisfaction in knowing you made the effort to do your best to become the best that you are capable of becoming. – John Wooden

Afterword. The good life is no easy task. Instead of relying on intuition, one should be aware of the biases/heuristics that the mind is susceptible to. Intellectual tools are more important than money. If your friend is not leading a good life, you will know it instantly. This book has provided insights on Stoicism. Throughout this book, I have quoted Charlie Munger and Warren Buffett. This book combines the principles of modern psychology, Stoicism and the philosophy of value investing.

9781473667495