The event might not sound like the hottest ticket in town, but last month a "festival" was held in the UAE to discuss the importance of internal auditing. Auditors work within companies to ensure that certain controls are in place for assessing and managing various business risks. Abdulqader Obaid Ali, the president of the UAE Internal Audit Association, who spoke at the event, discusses how companies can benefit from this small but growing profession.
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Why should companies consider having internal auditors?
Internal auditors point out weaknesses and risks in processes and systems, and provide recommendations to address these or mitigate the risks. Essentially, the value of internal audit is living up to its main role of being the mechanism in an organisation's governance structure that provides to the board information about the level and effectiveness of risk management and control.
How much value could this add to a company?
Value addition in financial terms is difficult to measure. There is no study yet, or available information, that will provide statistics on this for the UAE.
Fraud is one major risk for businesses, which you have said costs a company an average of 7 per cent of its gross revenue each year. Is this expected to be a growing trend this year?
For as long as people are part of systems and processes, fraud may happen or be engineered - of course, for various reasons. This is the reason why organisations who take their risk management processes seriously conduct fraud risk assessments from time to time. On the trend … we see very positive signs of more contained fraud risks and flattening, if not decreasing, incidences.
The Corruption Perceptions Index (CPI) is one measure for fraud you assess. How does the UAE fare on this scale?
Any [country on the] index above 5 is OK, or less corrupt, but the study [produced by Transparency International] shows that two thirds of countries have CPIs lower than 5. UAE's is somewhere at 6.5.
You aim to have more internal auditors tackling issues such as fraud. The qualification exam to become a certified internal auditor recently became available in Arabic for the first time. How will this affect the profession in this part of the world?
I understand that there are around 180 million Arabic-speaking people in the world, and in the [Middle East and North Africa] region English is not the first language. In the UAE, I understand that there are only five Emirati [certified internal auditors], even when a lot of expat internal audit professionals are already [certified]. The … qualification is the mark of excellence in the practice of internal auditing in the world, and you can just imagine where the profession would go and the level of awareness if a lot more Arabs get certified.