Visit our latest technical videos on this and other topics at: http://www.avivaspectrum.com/podcasts Learn more valuable information from Sonia Luna, the CEO of Aviva Spectrum, on the necessity, cost savings and advantages of a Quality Assessment Review (QAR): “Good to Great” Organizations have: * Professional & Organizational Credibility * Compliance with Standards brings them VALUE! * Continuous Improvement is the path to Long-Term Sustainability * Audit Committee Oversight is the “Ideas Bench” – Push beyond expectations (e.g. Sales Growth patterns, Marketing ROI, entry to new markets, product development, etc.) Aviva Spectrum is the premier provider of Internal Audit, SOX compliance, and Risk Management Services in the West Coast. Our goal in creating long-term, strategic partnerships with our clients is to establish efficient internal controls systems simply and effectively that in turn build core strength and efficiency in your corporate structure.

1. Compliance Made Simple ©

2. “Good to Great” Organizations have:
 Professional & Organizational Credibility
 Compliance with Standards brings them VALUE!
 Continuous Improvement is the path to Long-Term Sustainability
 Audit Committee Oversight is the “Ideas Bench” – Push beyond
expectations (e.g. Sales Growth patterns, Marketing ROI, entry to
new markets, product development, etc.)
Why have an External QAR?
Compliance Made Simple ©

3. The Top 3 Mistakes of QAR Leading to Compliance Penalties & Fees
What is a Quality Assessment Review According to the IIA?
The Value of a QAR and the Top 3 Revelations You Discover
How to Proceed
Who is Aviva Spectrum
Agenda
Compliance Made Simple ©

4. The Quality Assessment Review according to the IIA:
“Chief audit executives must develop and maintain a
quality assurance and improvement program that
covers all aspects of the internal audit activity. This
must be performed every 5 years.”
This leads us to … Mistake #1.
You may have missed the 5-year deadline. You don’t know
when your clock started ticking. You are supposed to start
your 5-year deadline the day that your department was begun
– the minute you hired the first person in that department.
The #1 Mistake You May be Making
Compliance Made Simple ©

5. A QAR reviews the overall effectiveness of an internal
audit function by assessing three criteria:
#1. Compliance with professional standards;
#2. The effectiveness and efficiency of function activities, organization,
resources and skill capabilities; and
#3. The evaluation and fulfillment of stakeholder needs.
(Deloitte, Quality assessment review, n.d.,
http://www.deloitte.com/view/en_BE/be/services/aers/internalaudit/qualityassessmentreview/index.htm)
Let’s back up for a moment…
What is a Quality Assessment Review?
Compliance Made Simple ©

6. If you do NOT have a QAR1, every document and report that goes out to your board needs to read:
“This report does not abide by the IIA professional standards
because we have not gone through a five-year QAR process. We have not gone
through this QAR process….. [Insert Excuse Here].”
This makes your company’s non-compliance transparent, but it’s also a big red flag as to the
authenticity of your internal systems. Even if your standard operating practices are 100% spot on,
having that outside voice concur and provide an overall approval is vital.
Mistake #2
Compliance Made Simple ©
1 – IIA Standard 2430 “Engagement Disclosure of Non Compliance with Standards”

7. For the focus in 2013, “KPMG’s Audit Committee Priorities of 2013” report states a key
priority is to “set clear expectations and make sure the internal audit has the resources,
skills and expertise to succeed.” A QAR provides the perfect roadmap for both the
Chief Audit Executive and the Audit Committee to ensure they are communicating and
executing on the organization’s expectations.
With a QAR, a report also is drafted by the assessment team, stating the internal audit
activity’s conformance or non-conformance with the Standards, as well as any
recommendations for improvement opportunities.
(Institute of Internal Auditors, Quality Assessment, https://na.theiia.org/services/quality/pages/quality-
assessment.aspx)
Compliance Made Simple ©

8. Although internal audit departments have vast and endless
responsibilities, seeing the disclaimer regarding the lack of a
timely QAR, a responsible CFO or Audit Committee
Chairman may very well demand that the Assessment be
moved on the top of the priority list.
Compliance Made Simple ©

9. Revelation #1.
An external Quality Assessment Review can facilitate the transformation of an internal audit
department into a more strategic business partner and value-added activity. A QAR identifies
strengths and improvement opportunities that position the internal audit function for ongoing
success and greater usefulness to the organization and to key stakeholders.
The external assessment team also identifies opportunities and offers recommendations for
improvement, providing counsel to the internal audit staff for improving their performance
and promoting the image and credibility of the internal audit function.
(Institute of Internal Auditors, THE EVOLVING INTERNAL AUDIT LANDSCAPE,
https://na.theiia.org/services/quality/Public_Documents/Quality%20Assessment%20Manual%206th%20Ed%20Chapter%201.pdf)
The Value of a QAR and
the Top 3 Revelations to Watch For
Compliance Made Simple ©

10. Revelation #2.
The process identifies opportunities and provides counsel to the chief audit
executive and staff for improving their performance and services, as well as
promoting the image and credibility of the internal audit activity. By defining
where a department stands, the team members can take ownership and feel
more empowered in their positions and in their larger role in the corporation.
(Protiviti, Internal Audit Quality Assurance Reviews, http://www.protiviti.com/en-US/Pages/IA-Quality-
Assurance.aspx)
The Value of a QAR and
the Top 3 Revelations to Watch For
Compliance Made Simple ©

11. Revelation #3.
By providing more opportunities for Best Practices and more fulfillment to team
members across the board, employees are more fulfilled and turnover is reduced.
(And less turnover can equal as much as $4,000 per employee for hiring alone – and up
to 200% of an individual’s annual compensation.)
A QAR provides the IA department the highest level of Organization commitment1
which, for accountants, turns into higher job satisfaction.
The Value of a QAR and
the Top 3 Revelations to Watch For
Compliance Made Simple ©
1 ORGANIZATIONAL AND PROFESSIONAL COMMITMENT AND THEIR EFFECT ON JOB SATISFACTION by Mr. Susanto
& Mr. Hastomo April 2012 Journal of Economics, Business and Accountancy

12. Compliance Made Simple ©
Visual of QAR and Job Satisfaction
IIA QAR
Tools 3 -
10
IIA QAR
Tools 4 -
15
1) Less turnover
2) Higher
productivity
Source: ORGANIZATIONAL AND PROFESSIONAL COMMITMENT AND THEIR EFFECT ON JOB SATISFACTION by Mr.
Susanto & Mr. Hastomo April 2012 Journal of Economics, Business and Accountancy

13. The added fact is that the average CFO or Audit Committee Chairman
is not the expert on internal auditing; they rely on each of their internal audit
departments to show them compliance.
Your internal auditors check and report on the quality of controls over your
financial reporting, safeguarding of assets, and operational efficiency and
effectiveness.
But who is checking on them?
Mistake #3 of not doing a QAR
Compliance Made Simple ©

14. Aviva Spectrum is the premier provider of Internal Audit, SOX
compliance, and Risk Management Services in the West Coast.
Our goal in creating long-term, strategic partnerships with our clients is
to establish efficient internal control systems simply and effectively
that, in turn, build core strength and efficiency in your corporate
structure.
Compliance Made Simple ©

15. Schedule a call with our CEO, Sonia Luna, so we
may develop a no-obligation proposal for you. Our
proposal turnaround time is approximately 5 – 7
business days after receipt of all necessary
information. (213) 250-5700
Next Steps
Compliance Made Simple ©

16. Sonia Luna, President, CEO
Sonia.Luna@AvivaSpectrum.com
700 S. Flower Street #1100
Los Angeles, CA 90017
P: (213) 250-5700
Contact Information
Compliance Made Simple ©