Internal audits shape business growth, says new auditors chief

Internal auditors play a vital role in company management, including helping firms to detect and prevent fraud, as well as testing internal control systems and monitoring compliance with company policy and government regulation. These functions are essential for any firm, especially small establishments. Unfortunately, in Rwanda, many local SMEs lack the audit role in their structures which has hindered their growth and success in obtaining credit from financial institutions, according to Gerald Nyangezi, the president of the Association of Internal Auditors of Rwanda. The umbrella body designed to enhance capacity and professionalism among local auditors. Nyangezi, who is also the head internal audit department at Bank of Kigali, talked to Business Times’ Peterson Tumwebaze about the new association’s top priorities, and how it is going to promote the culture of internal auditing in Rwanda, particularly among small businesses. Briefly tell us about the Association of Internal Auditors of Rwanda and factors behind its formulation The whole process of establishing the association started in 2011 with the aim of being able to apply for accreditation at international level. In Rwanda, for example, we didn’t have an institute for auditors and yet our regional neighbors have had such an institution for over 10 years. The objective, therefore, is to mobilize internal auditors under one umbrella body so that we can work together in developing the profession, sharing experiences, knowledge and assisting companies to assess and mitigate the risks involved in doing business. We also realized that all other professional bodies in Rwanda are working under similar structures and thought it was necessary to organize internal auditors under one umbrella grouping. What are some of the key issues the association will tackle? The need to raise visibility of the profession through advocacy, and promoting professionalism in the industry top the agenda. We also want to raise the visibility of internal auditors within Rwanda because auditors have a vital role to play in management of institutions. Therefore, the association will work to strengthen the capacity of its members to be able to handle the growing demand of auditors in the country. We will work with stakeholders to enhance efficiency and competitiveness of local auditors. Most SMEs do not use auditors. What do you think about this? Auditing is a value-addition function which companies, especially small-and-medium enterprises (SMEs) should place at the core of their businesses. Most SMEs face challenges when trying to access credit because they don’t have records of account. Banks cannot always rely on reports they prepared by firms themselves and, therefore, SMEs need to embrace the culture of hiring professionals to audit their enterprises and prepare professional reports. It is, therefore, critical that SMEs embrace auditing as part of the strategies aimed at boosting their relationship with financial institutions. Our role as auditors is to look at the effectiveness of their interventions and operations to safeguard the company’s assets How is the new body going to address the issue of lack of enough auditors in the country? The question of skills remains a big challenge and, as a matter of fact, our internal auditors are not yet at par when we compare with others in the East African region. Many of the local internal auditors have not had enough exposure and training to be able to handle the tasks at hand. There are several certifications which we don’t have locally but are competitive in the regional and on the international level; these include CIA ,CRMA, CFSA, CGAP, BEAC. We are, therefore, going to put in place mechanisms where our auditors will be trained and get certified in the near future. Internal auditors need to specialize and acquire certification, but this is currently hard because we don’t have the required training mechanisms. We must invest time to get that certification but also set certification benchmarks, especially in risk management and financial services audits, among others. So, we are already working with our counterparts in the region, and have worked out an affiliation programme with the African Federation of the Institute of Internal Auditors, which we hope will benefit the local association. We are working on a memorandum of understanding on how we can work together and they help us to start the process of certification this year. Our starting point will be to generate more visibility and recognition for the internal auditing profession, as well as encourage and promote certification of individual auditors. We have also applied for affiliation to international bodies that set standards for internal auditors. These include the Institute of Internal Auditors - Global, which is the international standards setting body for the audit profession. We are confident this will help us grow and also lead to adoption of international standards at the local level. business@newtimes.co.rw

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Internal audits shape business growth, says new auditors chief