Hodinkee Podcasts Summary (Part 4)

Episode 10 with Philippe Defour

Defour is a master watch-maker, who is a master in the industry. His ‘Simplicity’ is one of the most sought after 3 handers. He was on the jury of the GPHG. He is more familiar with only the high end segment.

We need to put the human back into watchmaking. The level of service has to step up, for instance, allow buyers to visit the watch factory and see the artisan making it. Brands try to drop the quality in order to cut costs etc, and that can be quite alarming. Young watchmakers are bored nowadays, and may not have the right mindset for the job. It is because the tasks given to them are too repetitive in nature. Hand-finishing is beautiful and is different from a CnC machine.

He still enjoys finishing a watch. Such a watch may give someone tremendous pleasure and that what keeps him going. Defour doesn’t see the industry shrinking although some brands have declined in their standards of watchmaking. Consumers are becoming more knowledgeable as well. Also, the modern generations are less likely to buy a Swiss watch because there are many other competitors.

Defour recommends a brand like Nomos, Lange and Sohne, Rolex etc. Rolex has a good quality for the price and are extremely reliable. Watches are not exactly affordable for the majority of people. Young people need to learn to wear better watches, as some are only keen on Smartwatches. The smartwatch provides a different experience to a mechanical watch.

Episode 11 with Tony Fadell

Tony is a tech guy who helped out in the creation of the iPhone, who is a die-hard watch collector. He used to wear a 5980 for an event. Throughout the years, he has collected 20 or 30 smartwatches and understand their differences and study the trends. He wants a stylish and functional watch instead of a computer. Most people don’t use the Apple watch as just for something that keeps time.

He also worked on the Ressence e-crown type 2 concept watch, which is a function to help tell the time better. The e-crown helps to set the time automatically. If you have a product where people both like and hate it, it’s fine, you can tweak the product accordingly. There is certainly a beauty of winding and setting the watch. The AP RD-2 was a hot release with awesome specs, and admired much by Tony. To me, he felt there was love and care in every aspect of the watch. Watch proportions are the key. You will need to embrace new technologies, in the past, people only carried pocket watches. He looks innovation at every level.

When smartwatches were first released, there were many executives who panicked as they saw it as a threat. Watches will have to evolve, embrace smartwatches or else you will die. JCB eventually created the best smartwatch with Tag Heuer. Tony got his first watch, a Tag, in the 90s. After that, his grandpa gave him his watch. Later, he went to buy a Panerai in Italy. After that, he was hooked on watches. There was a little community in Apple who were into mechanical watches as well. The Apple watch uses a strap-changing technology and allows people to swap straps easily. Since the talking watches, his watch collection has improved further.

He has collected some of the first Pateks in the market. One of his best watches is the Patek 2526. Is society ready to adopt new products? If no, sometimes it could be too early. Technology released to the market too soon, may not work, right thing but wrong time. The watch industry needs to get better in the watch design and production cycle.

Episode 12 with Spike Feresten

Spike is a legend in the comedy world, and is a comedy writer. Ted Gushue helped to connect Spike and Ben together. Spike loved the writing and photography from Hodinkee. He has also been on talking watches previously. Spike contacts Ben and Spike updates Ben when he needs advise on Porsches. His first watch was a Tag 2000 chronograph, which he had bought in a store. This was his first and only watch for a long time. Swatches were popular in the past, and they would climb in value, but eventually there would be a bubble. Later on, Spike used to get Heuers. He bought a 1960s Tonneau Heuer, and he simply loved it. His career involved getting some luck and breaks. Spike is wearing a 6263 PN Rolex Daytona for the show.

He managed to land some internships in the comedy space, including at Letterman. Most people don’t think that comedy writers can make a living. If you have things you are angry about, talk about that for stand-up comedy. Now, he hosts Car Matchmaker programme. Ben thinks about watches that could match the cars he drives. Ben is wearing a yellow gold 6263 PN Daytona. Spike also has a podcast with Ben, on cars and entertainment.

Spike believes in watches that are affordable, like Autodromo. For instance, another brand is Unimatic. James would like an early Explorer 2 as his grail.

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Hodinkee Podcasts Summary (Part 3)

Episode 7 with Scott Dadich

Scott works in the media industry. He was firstly the creative director at Texas Monthly and contributed to the Hodinkee magazine previously. He used to work for Wired magazine and is now with Godfrey Dadich Partners, a creative agency in California. During the show, he is wearing an Apple Watch. Vintage Rolexes are his soft spot. He is really in the deep end, and notices the intricacies of vintage Rolex. His first watch was the 1969, 1675 GMT. It can be really fun going to hike with a vintage Rolex Explorer. His gold Sub was one of his memorable purchases. A gold sports watch belies its original intention, but it doesn’t lose its appeal.

There is really something appealing about an Apple Watch, and it is largely because of its design, which has an interesting industrial design. Sneaker collecting can be really addictive and expensive. Scott does collect a few design books and art pieces as well. His top career moments include working with President Obama.

Episode 8 with Adam Scott

He is a professional golfer who has won the Masters previously. He finished 3rd in the 2018 PGA championship. Wingfoot is a historic golf club, with a rich history. Adam can’t afford to play badly even if it’s social golf. A pro who plays badly is very happy, no matter what occasion. Adam has much admiration for Tiger Woods and his massive achievements, although they are fierce competitors. It was an awesome experience winning the Masters. The Masters has one of the most appeal in terms of a golf tournament.

He is wearing a Rolex 2018 GMT Master II in two-tone Rolesor with a Root Beer bezel. Since 2001, Adam has been a Rolex ambassador and has been into vintage watches in recent years only. Rolex is definitely his kind of thing at the moment. He eventually managed to tour the Rolex factory and that completed changed his perception of the brand. Rolex usually only picks the winners from sports, so that they can wear the watch while they hold the trophy.

His favorite models are Subs and Sea-dwellers as they can be banged around. He has a Comex 16800 and the right provenance and history. Adam has a 6241 Paul Newman Daytona in his collection, and is planning his next Daytona purchase. Other things that he is interested in are furniture and chairs, surfboards etc. His wife wears some of his watches also, and is fine with his hobby. His family is golf crazy as well and introduced him to golf when he was young. The reception at home when he won the Masters was crazy.

When you’re playing good, you think you’ll never play bad. But when you’re playing bad, you don’t know when you will play good again. – Adam Scott

Episode 9 with Keegan Allen

He is an actor/photographer. There is a talking watches episode with him previously. He is wearing a 1675 Blueberry dial Rolex GMT Master II. Avoid using the watch in a pool etc. James is wearing the Tudor Black Bay GMT.

To Keegan, how the way a watch ages matters a lot. It’s hefty, but it wears extremely well on the wrist. An interesting thing about Keegan is that he wears a watch when he sleeps. He loves the ticking of the watch in his ear, like the tonal ping. He has written numerous photography books that reflects his history etc. The Hodinkee Talking watches episode has led to some strangers coming up to him and say hi.

Keegan uses his Leica M6 most of the time. His focus is definitely on street photography and stories. Using images to tell stories are simply awesome. You don’t know what you want until you touch and feel it. It was such an honour for Keegan to be on talking watches.

Watches isn’t an elitist hobby, but it’s a passion. One of his most important watches are the Patek 5164A Travel Time. Watches are one of the only main accessories that you can get as a man. If the watch hobby is not fun, don’t continue and do it. When you wear your favorite watch piece, it simply feels good. It used to be seen as tools in the past. Although Keegan has his grail, he still feels passionate about watches.

Watches can definitely outlive you, and take on a life of its own. A travel watch (GMT) suggests freedom, adventure etc. It is extremely hard to get a steel Rolex at the AD nowadays. Who you know at the AD matters. It is extremely hard to get a steel sports Rolex at the airports at the current moment. It can be scary to scratch up your gold Rolex, and one needs to be careful with it.

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Hodinkee Podcasts Summary (Part 2)

Episode 4 with Om Malik

He is a partner at True Ventures, a Venture Cap firm. He is wearing a beautiful Grand Seiko SBGR301. He and Ben went shopping in Paris and Wempe. True Ventures is one of Hodinkee’s biggest investors. Om does not appreciate people talking down on others’ collections. To him, to his each own, and is it important to respect someone’s collection.

Affordable watch coverage is important. Om has watches like Grand Seiko and Nomos (Nomos Zurich etc). Grand Seiko is really under-rated in the industry but it is gaining prominence. Even the Seiko Presage range is outstanding. Watches are an emotional product and means more to you rather than anyone else. His preference is for smaller brands, likes Ochs Und Junior, which are incredibly innovative. People who know watches will recognize Grand Seikos and realize that their finishing is outstanding. Some Swiss executives see the Grand Seiko as a threat.

Swatch did not see the Apple watch coming and should have innovated more. For the Apple watch, it’s more about its functionality and not so much about the time. The Apple watch has potentially health features. There are some who do not like quartz watches.

Quartz watches don’t have the same feel, charm, fun factor as a mechanical watch. The outstanding GS 9F Quartz, Longines VHP watch is something to aim for. Dismissing quartz watches is what some watch guys do. There is a certain pseudo-intellectualism in the watch community, which is to show off something that you know, even though you don’t know much. The pursuit of watches can be incredibly rewarding.

Om bought a Moser. It can be fun to save a bit every day before buying a watch. Do your watches bring joy to you? If no, please stop. The line between collecting and hoarding is very thin.

Om is working on a book of photos actually. He aims to slow down time by going on long photography trips. Hodinkee provides the platform for people to engage in their watch fanaticism. It gives people networking opportunities etc. Many of the employees working in Hodinkee really loves it. The Hodinkee meetups are heavily oversubscribed and provide so much joy to people who attend. Om loves PSM (Speake Marin) watches. Ben places a lot of emphasis on the dial, more than the case, like his Patek 2526, his Eberhard chronograph.

When you buy watches, you need to wear them, and not simply keep them in a safe. Watches need air. If you wear it often, price-per-wear definitely reduces a lot. Most people end up acquiring things for no reason. For everything that you buy, think about its happiness quotient? What is the happiness that the object can bring? Never live your life based on what others think. Remember that happiness definitely comes first.

 

Episode 5 with Eric Ku

Eric is well respected watch dealer/collector in the industry. He is the guy to go to for vintage watches. He is wearing a Patek 3939, which is an enamel dial, minute repeater tourbillion. Since young, he had a fascination with mechanical watches.

In the 1990s, the Daytonas and Explorers grew in popularity. In the past, arbitrage for Rolex Explorers could be done. His first vintage was a Red Sub, in 1998. In his early days, he made some mistakes, but gradually he started learning from his mistakes. Watch knowledge and nomenclature was not documented on the Internet yet. Dealers will try to push the prices on something if they find something rare, but it is the market that dictates the pricing. Five digits Rolex prices are shooting up, even though they are not rare. As time passes, there are more vintage watches that are coming up, due to them ageing. This is also known as the ‘New Vintage’. People appreciate the smaller sizes of the older Rolexes.

Many retailers are not getting good allocation of steel sport Rolexes. Prices are shooting through the roof, but will they collapse one day? Pre-own watches are getting more common nowadays. Things are cyclical and prices will drop someday. What comes up, must come down, but there might be a slight upward trend. The pool of vintage keeps shrinking, as watches get lost/damaged etc. Auction records is like navel gazing and you can compare with previous auction prices. In a way, auction prices help to reflect the enthusiasm of the product. The truth is that there are so few that can afford 7 figure watches, so the auction records don’t mean much. Prices crashed in 2007/2008. In every business, there are good and bad times. The ultra-rich class has grown a lot more.

It’s very difficult for a newbie to get into vintage watches, 1675 and 5513 as they are more than $10,000 or more. Someone like that could consider other brands, like Cartier, Universe Geneve. Nomos makes a good watch for the price. The modern Rolex is now out of reach to most people. His first watch that cost over $10,000 was a Vianney Halter Antiqua. Eric really supports independent watch-makers. He appreciates brands like Gronefield and Cartier. Cartier produces timeless designs, like the Cartier Tank Cintree. Early Cartiers are really rare and desirable. Bubblebacks were popular, but fell out of favour recently. Large watches are over-rated. There is a trend nowadays, where brands are making smaller watches.

Rolex 36mm are the best fit. Good design is always timeless. Eric recommends 34mm Rolexes from the past, for about 2 to 3k. The good thing about Rolex is that they can retain their value well. Vintage gold Rolex watches are undervalued at the moment. Two important lessons are (i) condition of the watch (buy the best version based on your budget); (ii) buy what you like. Spend time to research about what you like.

Eric is really into food and trying our excellent restaurants as well.

 

Episode 6 with Todd Snyder

He is the founder of Todd Snyder brand of clothing. Cara has worked with Todd and has provided vintage watches for them to sell. Todd’s store is to be the one stop shop for a guy. Everything in the store is really edited and curated well. You can get everything in Todd’s. There are over 2,000 books for sale in the store.

Todd got inspired and worked for Ralph Lauren eventually. He brought a few Timex, Tudor Black Bay Chrono, Tudor Ranger and a Rolex as well. Since young, he has always worked in clothing stores and with tailors. He has always been interested in how garments were made etc. If you want to be the best, work for the best. Knowing the basics of clothing is the key. Working for Ralph was a dream come true for Todd. Todd even offered to work for free just to get to work for Ralph, and it worked. His advice for kids are to ‘work hard, innovate and be nice’. If you have poor attitude, you won’t go far in life. Todd has also worked in GAP and JCrew, key American brands. Ralph always reinvents iconic fashion and created their own styling to it. Todd tries to reinvent the basics and improves on them, making them very desirable.

He is also rather big on collaborations, like with RedWing etc. Todd would love to collaborate with an interior designer/architectural firm. The Timex Marlin collaboration was a huge success. Timex is one of his favorite brands, as his Dad owned one previously. He is definitely planning some more collaborations in future.

Tudor is definitely the value for money brand, as compared to Rolex. For clothes, it is really important to start off with great basics which fit well.

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Hodinkee Podcasts Summary (Part 1)

Episode 1 with Ben Clymer

He was not interested in finance/consulting career and realized that after his role in banking. Started writing about grandfather’s watch on Tumblr and then Squarespace. It started off as a hobby. Back then, finance was the place where everyone wanted to be.

The first Hodinkee post was about the Eric Clapton’s Paul Newman Daytona. Gandhi’s watch, Einstein’s watch started coming up for sale at that time. He definitely has a flair for writing/photography and wanted to marry the two things together. The whole journey has been fun, especially meeting the press, going on press trips etc. Not many believe that one can start a career in the watch industry. The press trip by AP in 2009 was exceptional and really eye-opening, and it was really surreal. The hyper-lux world isn’t something that many are familiar with and can relate to.

Meeting Jay Z and writing for him, as well as meeting John Mayer were moments he knew that times changed and that Hodinkee was for real. Hodinkee started selling straps with vintage feel at the start. John Mayer also started writing for Hodinkee in 2012. He was also the first to be filmed for the Talking Watches series. The moment Stephen and Will joined were also massive highlights.

Hodinkee has a staff strength of 28 now, including full-time designers and engineers. In 2014, a large company offered to purchase the brand. In 2015, Watchville was launched. Other editors that were hired included Jack, Cara, John, James etc. Hodinkee’s audience is really educated and sophisticated.

Most of the time, it isn’t the best idea to get a cheap version of a certain watch model and it’s better to get the best version of a particular watch. Some of the common questions that people ask are what are the good investment pieces? Can you get me a discount on a watch? How does the name Hodinkee come about? Hodinkee means wristwatch in Czech.

Hodinkee is good at being the bridge between the hyper-lux world and reality. There could certainly be room for improvement in the watch boutique experience. As people decided to buy watches because of Hodinkee’s articles, this showed other watch brands the power of marketing. This proves that Hodinkee has plenty of might in terms of marketing and their e-commerce site. Almost all their limited editions have been sold out. Hodinkee propagated the love for vintage watch and new watches that had a vintage vibe. The ideas behind the limited editions are truly an organic process and fun. Almost all the limited editions have been great successes.

Ben’s grandfather gave him a Mark 40 Omega chronograph when he was 16, and that started Ben’s love for watches. Cars and cameras are a big thing for Ben as well. He plans to stick around to grow Hodinkee further. Success is not guaranteed even if you were successful before with a previous venture. Success is never easy.

Episode 2 with Gary Shteyngart

He wrote an article on watches for the New Yorker in 2017. His upcoming book is ‘Lake Success’. Gary is an author and watch collector and a strap tanner. His watch collection started in 2016 and he was originally from Russia. One of his first few watches is the Junghans Maxbill (Bauhaus design), Nomos. Mid 20th century was an awesome period. He grew up with an electronic Casio musical watch. His taste isn’t gaudy, but is anti-ostentatious and doesn’t want people to notice them. In the past, watches for most appeared to be too large.

The signaling of watches is very important, especially in rich cities like Singapore. It is a natural breeding ground for luxury watches. The watch community is so small, but meeting someone who is into watches is incredibly inspiring. Watches are certainly a very pricey hobby, especially if you are vintage Rolex. If you are bad at driving, a Rolex Daytona just doesn’t fit your image. Gary loves GMTs and divers. Desk divers are great as well and it helps to aspire to things. The Omega Speedmaster has a rich heritage as it has been to the Moon and is commonly known as the Moonwatch. William Gibson is one of Gary’s inspirational writers.

Gary bought a Rolex Explorer 1016, which is simply a lovely watch. He owns a 1675 GMT-Master II, and a Patek 3445. The vintage market is kind of heated, unfortunately. To him, movements are important but they are more difficult to understand, unlike dials. Seamasters with the 321 movements are super rare and desirable. The one watch man is simply a dream to many, like an aspirational goal, like a unicorn. As a matter of fact, faux-patina is not something that he fancies.

Nostalgia is a big thing in the watch industry nowadays. With a trend of nostalgia, how will brands create anything new and appealing to the market?  Oak and Oscar borrows vintage cues, but makes it modern as well.

When you own a mechanical watch, you believe in the traditional craft and the beauty of time. However, when you check the time on a phone, you are constantly distracted. It’s like physical books, there will still be a market for it. The apple watch does different things as compared to mechanical watches, and is unlikely to displace them. It probably isn’t a good idea to treat watches as investments. There are plenty of good vintage watch finds in El Paso.

Episode 3 with Rian Johnson

He directed the latest Star Wars film. Twitter is like a war. Rian is wearing a beautiful Rolex Explorer 1016 (1965) with a tropical dial (caramel colour). There is an element of engineering to screenplay. He doesn’t like writing, but he is a producer and director at times. Rian obviously prefers being the director. He bought a Speedmaster (pre-moon, 1969) when he was picked for Star Wars. Each of his watches has a story, and says a bit about particular moments of his life. Sometimes, you even know the history of the watch that you own if it’s pre-owned. Now, he has appreciated vintage watches. He wore his dad’s watch during film shooting, in order to re-connect with him as he passed away. Patek’s 3417 Amagnetic is one of his grail pieces.

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SSA 300 – Planning an Audit of Financial Statements

Good planning can really help to focus the audit and make it more efficient and effective.

The objective of the auditor is to plan the audit so that it will be performed in an effective manner.

Engagement partner and key members of the engagement shall plan and discuss the planning with the team.

The auditor needs to perform procedures on client relationship and engagement, evaluate compliance with ethical requirements and understand the terms of the engagement.

The audit plan shall include the nature, extent, timing of planned audit procedures and also the resources required to complete the audit. The audit strategy can be modified as the audit progresses. The extent of supervision also needs to be planned.

The audit plan and strategy must be part of audit documentation (can be memorandum form, checklists etc). Significant changes to the audit plan needs to be explained. Planning needs to consider things like analytical procedures, understanding of legal framework, materiality, involvement of experts etc.

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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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