The Malta Forum for Internal Auditors is holding its annual international conference on Wednesday afternoon at the Westin Dragonara.

The Malta Forum for Internal Auditors (MFIA) is a not-for-profit organisation set up by local professionals in the field to promote awareness on the role of internal auditing in the local business and non business community, to support education about the profession and to provide appropriate networking opportunities for both peers and professionals in the field, students and executives.

In an interview to this paper, the chairman of the MFIA, Christopher Borg, explained that internal audit, as a value-added activity, helps an organisation achieve its objectives by using a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

The debate revolves on how added value can be assessed.

While ‘added value’ achieved through traditional sales, support and production processes is more tangible and relatively easier to establish, measuring ‘added value’ from internal audit is more intangible and more difficult to quantify.

The contribution of internal audit to promote operational efficiencies and instigate required operational, organisational and behavioural change, and to improve overall corporate risk management culture and internal control systems, although strategically significant, are harder if not impossible to quantify in tangible terms.

Still, management and the board are appreciating more and more the significance and relevance of internal audit recommendations in supporting their decision-making process.

This directs the internal audit function to evolve, widen and build on its traditional roles. To this effect more are talking on the dual role that can be played by internal audit as an assurance and facilitating function.

The seminar is geared to raise awareness about the role of the internal auditor in contemporary organisations and debate the value added that internal audit provides to both the Audit Committee and to Management.

The internal audit function is an evolving profession demanded by today’s complex evolution of business and in specific industries even directly required by regulation. An internal auditor is not there to recover business dues, nor to supervise the staff or to assume responsibility for internal controls. Management and the board are, in their own spheres, responsible to ensure all this. The internal audit function provides independent and objective assurance that the controls implemented by management are indeed functioning and efficient, and when relative diagnostics indicate otherwise, give recommendations for improvement in controls and operational efficiencies.

In an appropriate governance setting, the internal audit function is set as an autonomous unit within an organisation with direct reporting lines to the Audit Committee and to the Board of Directors. In a sense an Internal Auditor is like an ‘internal doctor’: he can help you identify what’s wrong with you and prescribes recommendations, but then it’s up to you to take the actions and medicines he recommends. Value added can indeed be lost if recommendations are not acted upon.

This relatively new and still evolving function in the local business context requires a person with personality, professional versatility and good business acumen, who can assert what needs to be done, with enough persuasive skills to be persistent with his proposals to management. In Malta it is a growing professional discipline and more students and young specialists are being attracted to the profession.