Annual Report. Institute of Internal Auditors of Saskatchewan

Transcription

1 Annual Report Institute of Internal Auditors of Saskatchewan

2 Table of Contents Mission Board of Governors... 4 President s Report... 5 Treasurer s Report... 7 Financial Statements May 31, Financial Statements Preliminary May 31, Newly Designed Professionals Internal Audit Awareness Proclamations

3 Mission The mission of The Institute of Internal Auditors is to provide dynamic leadership for the global profession of internal auditing. Activities in support of this mission include, but are not limited to: Advocating and promoting the value internal audit professionals add to their organizations. Providing comprehensive professional educational and development opportunities, standards and other professional practice guidance, and certification programs. Researching, disseminating, and promoting knowledge concerning internal auditing and its appropriate role in control, risk management, and governance to practitioners and stakeholders. Educating practitioners and other relevant audiences on best practices in internal auditing. Bringing together internal auditors from all countries to share information and experiences The Institute of Internal Auditors (IIA) Saskatchewan Chapter is a non profit corporation empowered to perform any and all acts defined in the Certificate of Incorporation and the Bylaws of The Institute of Internal Auditors, Saskatchewan Chapter Inc. Our activities support the missions of the IIA global body (IIA Global) and The Institute of Internal Auditors Canada (IIA Canada) and are focused on IIA members in the province of Saskatchewan. The Saskatchewan Chapter s main activities include organizing professional development events, promoting and advocating for the profession, providing opportunities for members and other stakeholders to share knowledge, liaising with the IIA Global, IIA Canada, Canadian Chapters, and other stakeholders and partners, and involvement in national and international IIA committees. 3

4 Board of Governors Executive Tracy Hepworth, CPA, CA, CIA, ACC President David Helberg, MBA, CIA, CFE, CRMA Past President Terina Bird, CPA, CA VP Programs Mark Hillmer, CPHR, CIA, CRMA VP Membership Members of the Board of Governors Nathan Thomson, CPA, CA, CIA, CFE, CRMA VP Finance & Admin James Barr, CPA, CA, CRMA Bina Bilkhu, CPA, CMA, CIA, CRMA Mewael Eyob, MBA, CPA, CMA, PMP Dr. Kenneth A. Fox, PhD., CPA, CA, CIA Clinton Griffiths, CPA, CA, CRM Scott Hamilton, CPA, CA, CFE Kent Kraft, CPA, CMA, CIA Quinton Kyler, CPA, MPAcc Don Sealey, CPA Ian Weimer, CPA, CMA, CRMA 4

5 President s Report Tracy Hepworth, CPA, CA, CIA, ACC President What better way to close Internal Audit awareness month than by sharing the success of the past year with our members at our Annual General Meeting. The Board charted a course for that was consistent with prior years. Our four priorities were: to be a high performing chapter, to be the voice of the profession, deliver learning and development and foster a unified network of audit professionals. The Saskatchewan Chapter has achieved an operating status of Platinum, the highest ranking available, for many years and was no exception. We operate consistent with best practices meeting reporting requirements, maintaining high quality books and records and related review processes, engaging in annual strategic planning, documenting desired board composition, establishing a formal Board nomination process, investing in future chapter leaders, and providing acknowledgement to volunteers. Awareness activities centered on the University population. Volunteers attended various on-campus events and we continued our dialogue with the University of Saskatchewan, working towards an opportunity to participate during class time to raise awareness of the profession. As well, we obtained IIA Awareness Month proclamations from the City of Saskatoon, City of Regina and Province of Saskatchewan and sent a news release to major media outlets in both Regina and Saskatoon. The learning and development component of our plan focused on delivering local events to benefit our members. Budget dollars are limited for many, making this objective an ongoing challenge. We relied on complimentary speakers from the major accounting firms as well as member organizations to host a luncheon in October (Regina) and short professional development sessions in conjunction with our Christmas luncheons (Regina and Saskatoon). As other non-profit professional organizations face the same challenge we do, we experimented with hosting a joint breakfast event with the FMI Regina Chapter. This was an excellent opportunity to pool our collective resources to deliver value to our members. Evaluating Organizational Ethics, our only formal learning program, was organized by IIA Canada and attracted several out of province participants. We continue to strengthen the network of internal audit professionals. Our annual golf tournament was a great opportunity to connect with colleagues as were any of our learning events. We continue to bring together our community of Chief Audit Executives to discuss common issues, hosting three roundtables during the year. We ve maintained the traditional communication methods of our website and monthly newsletter to keep members informed. Finally, we ve started an analysis of our membership to better understand its composition and the opportunities to increase our network. The Chapter operates in a financially responsible manner. To operating within the cash reserve guidelines outlined by the IIA, we planned for a small deficit for the year. Preliminary financial results indicate that while we will incur a deficit, it will be slightly less than originally planned. It has been an absolute pleasure to serve in the role as President of the Saskatchewan Chapter. Reflecting 5

6 on my experience over the past two years, there are four highlights I d like to share. Learning and opportunity I ve learned a great deal about the IIA how it s organized, how it operates and how it supports local chapters in executing its mission. I ve benefited from learning opportunities such as the annual Leadership Academy for chapter leaders, Canadian district meetings, and the opportunity to participate on IIA Canada s strategic planning working group. I ve had the great opportunity to meet many excellent and passionate internal audit practitioners; from my fellow board members, to representatives of IIA Canada chapters, to IIA National employees, to IIA Canada employees to the CEO of the IIA, Richard Chambers. Thank you for the privilege of serving as your Chapter President and thank you to all those that have been part of my journey the past two years. I look forward to my continued involvement on Board in the role of Past President. Tracy Hepworth, CPA, CA, CIA, ACC Create awareness There is a general lack of awareness of Internal Audit profession. I see this in my own organization and it was especially evident as I attended a University career fair. Very few students were aware of the IIA and the profession of internal auditing. There is still more work to be done, both through the IIA and as individual practitioners, to increase awareness and educate. Best in class - Among chapters in North America, Saskatchewan is truly a high-performing chapter. We may not be the biggest but, we have a solid foundation of well-organized practices that are diligently executed by caring and conscientious volunteers. Dedicated volunteers Volunteers run the Chapter. I would not have been able to effectively fulfill my role without the amazing team of volunteers that I have the pleasure to work with. Together, combining our unique talents we are stronger and able to accomplish more. I hope you will consider volunteering your time and talents to the Chapter: you will learn, you will expand your network and you will be part of something bigger. And if you don t choose to volunteer, I m confident that you will advocate for this great profession. THE AGILE AUDITOR IN AN AGE OF DISRUPTION Join us in Montreal for the IIA National Conference as we explore the opportunities you might be missing 6

7 Treasurer s Report Nathan Thomson, CPA, CA, CIA, CFE, CRMA VP Finance & Admin The following report includes the May 31, 2017 Financial Statement (pages 8-16) and the projected May 31, 2018 results (pages 17-19). The 2017 Financial Statements were reviewed by Brian N. Humble, CPA in August 2017 (refer to page 9 for the Review Engagement Report). The final yearend results were comparable to those shared at last year s AGM. The preliminary results reported at the 2017 AGM projected a deficit of $9,217, while the actual deficit was $9,882. The difference was primarily due to additional costs associated with hosting the 2017 AGM and Professional Development day. The Budget for the May 31, 2018 year-end was prepared during the summer of 2017, and upon Board approval in September was submitted to IIA Headquarters. The Chapter operates in a financially responsible manner, facilitated through the following: - Annual review of the Cash Reserve Guidelines; - Operating Budget is aligned with the above guidelines and approved by the Board in September; - Chapter spending and reserves are monitored by the Board through monthly Financial Statements and Forecasts; - An Independent Board Member reviews Financial Statements and Bank Statements on a quarterly basis; and - Chapter President and Treasurer perform Quarterly controls signoff. The Chapter s Cash Reserve Guidelines is based on guidance from the IIA and considers both annual operating expenditures and chapter size. The Chapter has targeted cash reserves to be 40% of the annual operating budget. Excess reserves are to be used to benefit local members over a rolling three-year period. Appropriate activities, such as subsidized training and increased academic relations, advocacy and promotional efforts are considered and planned annually. The Chapter continues to have a strong balance sheet with additional cash placed in redeemable term investments to allow flexibility of operations and ease of access to funds. In accordance with the Cash Reserve Guideline, a budgeted deficit of approximately $6,000 was approved for the May 31, 2018 fiscal year. Chapter spending was generally in line with the approved budget, with a slight overspend of approximately $1,700 (7.5%). However, the additional spending was determined to be reasonable due to revenues exceeding budget by approximately $6,700 (41%). These additional funds were primarily the result of Chapter events. The deficit for the 2018 fiscal year is currently projected to be approximately $1,000 ($5,000 better than budget); however, this is subject to finalizing of the costs of the May events, including the AGM. Thank you for the opportunity to serve as the Chapter Treasurer for the past three years. Nathan Thomson, CPA, CA, CIA, CFE, CRMA 7

8 Financial Statements Institute of Internal Auditors, Saskatchewan Chapter, Inc. Financial Statements May 31,

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10 Institute of Internal Auditors, Saskatchewan Chapter, Inc. Statement of Financial Position As at May ASSETS Current Cash $ 26,251 $ 37,916 Investments (Note 3) 27,330 27,200 Accounts Receivable 340 2,964 $ 53,921 $ 68,080 LIABILITIES AND NET ASSETS Current Accounts Payable $ 7,561 $ 11,662 GST Payable ,725 12,002 Net Assets unrestricted 46,196 56,078 $ 53,921 $ 68,080 See accompanying notes Prepared without audit Approved by: Director Director 10

11 Institute of Internal Auditors, Saskatchewan Chapter, Inc. Statement of Operations and Changes in Net Assets For the year ended May REVENUE Events (Note 5) $ 31,233 $ 40,395 Allocation from International Institute 2,826 2,930 Interest Job Advertisements 2,700 3,900 $ 37,001 $ 47,523 EXPENDITURES Events (Note 5) 30,744 31,568 Leadership Academy 4,926 3,973 Chapter and District expenses 3,884 1,882 Promotion and gifts 2,930 2,266 Bank charges 2,114 3,466 Professional services 2,051 2,200 Sundry ,883 45,671 Excess of revenue over (under) expenditures (9,882) 1,852 Net assets unrestricted, beginning of year 56,078 54,226 Net assets unrestricted, end of year $ 46,196 $ 56,078 See accompanying notes Prepared without audit 11

12 Institute of Internal Auditors, Saskatchewan Chapter, Inc. Statement of Cash Flow For the year ended May OPERATING ACTIVITIES Excess of revenues over (under) expenses $ (9,882) $ 1,852 Net change in non-cash working capital balances Related to operations (Note 4) (1,653) 4,671 Cash provided by (used in) operations (11,535) 6,523 INVESTING ACTIVITIES Net disposal (acquisition) of investments (130) (178) Cash provided by (used in) investments (130) (178) Net (decrease) increase in cash during year (11,665) 6,345 Cash, beginning of year 37,916 31,571 Cash, end of year $ 26,251 $ 37,916 See accompanying notes Prepared without audit 12

13 1. Authority and Description of Operations The Institute of Internal Auditors, Saskatchewan Chapter, Inc. is a non-profit organization devoted to promoting the profession and promoting professional development opportunities to its members. 2. Summary of Significant Accounting Policies Basis of Presentation The financial statements have been prepared in accordance with Canadian standards for Not for Profit Organizations and include the following significant accounting policies: a) Financial Instruments The Institute initially records a financial instrument at its fair value except for a related party transaction which is recorded at the carrying or exchange amount depending on the circumstances. The Institute recognizes its transaction costs in net earnings in the period incurred. However, financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption. Subsequently, the Institute measures financial assets at amortized cost and financial liabilities at amortized cost. Financial assets measured at amortized cost include cash, accounts receivable and fixed income investments. Financial liabilities measured at amortized cost include accounts payable and accrued liabilities. At each balance sheet date, the Institute assesses whether there are any indications that a financial asset measured at cost or amortized cost may be impaired. If there is an indication of impairment, the Institute determines if a significant adverse change has occurred during the period in the expected timing or amount of future cash flows from the asset. If there is a significant adverse change, then the Institute reduces the carrying amount of the asset accordingly. A previously recognized impairment loss is reversed to the extent that the improvement can be related to an event occurring after the impairment was recognized. 13

14 b) Revenue Recognition Event revenue is recognized when the event takes place. Grant revenue is recognized when received. Interest revenue is recognized when earned. c) Contributed Services Volunteers contribute many hours a year to assist the Saskatchewan Chapter in carrying out its service delivery activities. Because of the difficulty of determining their fair value, contributed services are not recognized in the financial statements. d) Inventory Inventory of supplies is carried at the lower of cost and current replacement cost. Significant supplies with a unit cost of $200 or more are recognized in inventory. e) Measurement Uncertainty (use of estimates) The preparation of financial statements in conformity with Canadian accounting standards for not for profit organizations required management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accounts receivable are stated after evaluation as to their collectability and an appropriate allowance for doubtful accounts is provided where considered necessary. Provisions are made for slow moving and obsolete inventory. Amortization is based on the estimated useful lives of capital assets. These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in earnings in the periods in which they become known. f) Foreign Currency Transactions The enterprise uses the temporal method to translate its foreign currency transactions. Monetary assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Other assets and liabilities are translated at the exchange rate in effect at the transaction date. Items appearing in the current year s income statement, except for the cost of the inventories and amortization translated at historic rate, are translated at average year rates. Exchange gains and losses are included in earnings for the year. 14

15 3. Financial Instruments The Institute s financial instruments consist of cash, accounts receivable, investments and accounts payable. The fair value of cash, accounts receivable and accounts payable approximate their carrying amounts. The fair value of investment is disclosed below. Short Term Investment Maturity Date Interest Rate 2017 Market Value Conexus Credit Union Jun 5, % $10,000 Conexus Credit Union Sep 25, % 11,754 Conexus Credit Union Jan 21, % 5,576 Total short-term investments $ 27,330 Risk and Uncertainties The Institute is exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth. The main objectives of the Institute s risk management process are to ensure that risks are properly identified, and the capital base is adequate in relations to these risks. The principal financial risks to which the institute is exposed are described as follows: Credit Risk The Institute is exposed to credit risk in the event of non-payment by its members and clients for their accounts receivable. Liquidity Risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The enterprise is exposed to this risk mainly in respect of its accounts payable. Currency Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Some of the company s assets are exposed to foreign exchange fluctuations as the corporation has foreign currency balances at year end. As at May 31, 2017 US cash balances of $2,670 ($2, ) are converted into Canadian dollars. 15

16 Interest Rate Risk The Institute is exposed to interest rate price risk with respect to its investments, which bear a fixed rate of interest. 4. Net Change in Non-Cash Working Capital (Increase) decrease in accounts receivable $ 2,624 $ (2,095) Increase (decrease) in accounts payable (4,277) 6,766 $ (1,653) $ 4, Event Self-Funding Activities The break down of event self-funding activities is as follows: Revenue Socials (Christmas and Golf) $ 4,090 $ 3,290 Professional development 27,143 37,105 $ 31,233 $ 40,395 Expenses Socials (Christmas, golf and networking) $ 6,292 $ 4,568 Professional development 24,452 27,000 $ 30,744 $ 31,568 Prepared without audit 16

17 Financial Statements Institute of Internal Auditors, Saskatchewan Chapter, Inc. DRAFT Preliminary Financial Statements May 31,

18 Institute of Internal Auditors, Saskatchewan Chapter, Inc. Statement of Financial Position As at May 31 (DRAFT) Preliminary ASSETS Assets Cash $ 24,005 $ 26,251 Investments 27,460 27,330 Accounts Receivable 1, $ 53,091 $ 53,921 LIABILITIES AND NET ASSETS Current Accounts Payable $ 7636 $ 7,561 GST Payable ,888 7,725 Net Assets unrestricted 45,203 46,196 $ 53,091 $ 53,921 DRAFT 18

19 Institute of Internal Auditors, Saskatchewan Chapter, Inc. Statement of Operations and Changes in Net Assets For the year ended May 31 (DRAFT) Preliminary REVENUE Events $ 16,380 $ 31,233 Job Advertisements 3,150 2,700 Allocation from International Institute 2,637 2,826 Interest and Other Income 1, $ 23,214 $ 37,001 EXPENDITURES Events 12,331 30,744 Leadership Academy 5,395 4,926 Professional Services 2,324 2,051 Chapter and District expenses 1,969 3,884 Promotion and gifts 1,134 2,930 Bank charges 662 2,114 Sundry Bad Debt ,207 46,883 Excess of revenue over (under) expenditures (933) (9,882) Net assets unrestricted, beginning of year 46,196 56,078 Net assets unrestricted, end of year $ 45,203 $ 46,196 DRAFT 19

20 Newly Designated Professionals There are many reasons to earn an official IIA certification designation. Whether it's the hallmark CIA designation or one of the four specialty industry certifications, obtaining a certification is professionalism defined. Earning your certification is a key to the vast world of opportunities the profession of internal auditing offers. It opens doors you did not even know existed, as the three or four letters that now follow your name make a powerful statement about the expertise you bring to the table. Becoming certified will: - Help you earn credibility and respect in your field - Open more opportunities for advancement - Increase your earning potential - Prove your willingness to invest in your own development - Demonstrate your commitment to your profession - Improve your internal audit skills and knowledge IIA Saskatchewan is pleased to acknowledge the following members on achieving their certifications in : - Build confidence in your knowledge of the profession Cherise Burns - CIA FCC Amie Link CIA - Affinity Credit Union Matthew Oliver - CIA - Nutrien 20

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