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Dates Topics Members Non-Members 1/15/2014 Governmental Accounting (Lunch) $16 $19 2/19/2014 Fraud and Ethics (Half-Day Seminar) $50 $65 4/16/2014 Audit Communication (Half-Day Seminar) $50 $65 5/21/2014 COSO (Lunch) $16 $19

Happy New Year!

On behalf of our Chapter Board and Officers, I would like to greet each of you. Let’s make 2014 a year of increased knowledge and skills in the auditing profession!

We were successful last year and my hopes are that our chapter will continue to build on the success with increased attendance and networking opportunities. If you have not had the opportunity to join us for a meeting, please feel free to join us for one of our upcoming meetings. We have two lunch meetings and two half-day seminars scheduled through May. Our meeting location changed at the last minute and we had to reschedule the October Half Day Seminar to April 2014.

Please review the SAVE THE DATE section below for specific dates, times and location. You may register for any event by emailing our Hospitality Chairperson at iia_inlandempirechapter@yahoo.com.

The Chapter will need to elect new Officers and Board of Governors in the next month or so. Also, we will need chairperson(s) for the various committees within the chapter. As such, we are looking for those who are interested in giving back to profession by volunteering in any capacity. Please feel free to reach out to me with interests, questions, etc.

I hope to see you at one of our upcoming meetings!

Best Regards, Carmen Carmen McGowin-Paul, President, IIA Inland Empire Chapter #257

More information is available at www.theiia.org/inlandempire To register, email us at iia_inlandempirechapter@yahoo.com!

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ISSUE HIGHLIGHTS: President’s Message ............................. 1 Save the Date ........................................ 1 November 2013 Seminar ...................... 2 CIA Learning System ............................. 2 Bookstore Spotlight................................ 2 San Diego Training Opportunities......... 3 Certified Internal Auditor (CIA) .............. 3 Article: “Q&A with Richard Chambers” . 4 SoCal Chapter Milestones .................... 6 Share with Us! ........................................ 6 Volunteer! ............................................... 6 February Fraud & Ethics Seminar ........ 7 International Conference ....................... 8 Article: “Good News for IA” ................... 9 Career Opportunities ........................... 10 Gleim CIA Review System .................. 10 Chapter Volunteers .............................. 10

On Wednesday, November 20, 2013, the IIA Inland Empire Chapter hosted its first full-day seminar of the chapter year—an informative and engaging Crash Course on the foundation for all field audits presented by Danny Goldberg. Danny’s session focused on planning for efficient and effective audits, the basics of audit level risk assessments, and appropriate steps throughout the planning phase of an audit. The event was a great success, bringing over 50 chapter members and audit professionals together to learn and network. Those in attendance would agree that the seminar was an incredible value and featured insightful information and an invaluable opportunity to network with other professionals. Join us throughout the 2013-2014 chapter year at other chapter events for great opportunities to grow professionally!

IIARF Bookstore Spotlight No One Would Listen: A True Financial Thriller No One Would Listen is the exclusive story of the Harry Markopolos-led investigation into Bernie Madoff and his $65 billion Ponzi scheme. While a lot has been written about Madoff's scam, few actually know how Markopolos and his team, affectionately called "The Fox Hounds" by Markopolos himself, uncovered what Madoff was doing years before this financial disaster reached its pinnacle. Unfortunately, no one listened, until the damage of the world's largest financial fraud ever was irreversible. Since that time, Markopolos openly has testified and questioned the enforcement and fraud investigation capabilities of the U.S. Securities and Exchange Commission (SEC), shared a sliver of this page-turning story with 60 Minutes, and become perhaps the world's most visible and insightful whistleblower on fraud and conflicts of interest in financial markets. Throughout the book, Markopolos and his Fox Hounds tell their firsthand story of investigating Madoff with the help of bestselling author David Fisher. They explain how they discovered the fraud, and then how they provided credible and detailed evidence to major newspapers and the SEC many times between 2000 and 2008, only to have the warnings ignored repeatedly by the SEC. No One Would Listen:

The IIA's CIA Learning System is a comprehensive training course designed to provide chapters, members, and the audit community of professionals with information and tools to master the global CIA exam syllabus. This premier quality program is aligned with the International Professional Practices Framework (IPPF) to ensure you stay current with the global internal auditing profession and are ready for the CIA exam. It combines printed text with online testing tools and online questions. Take advantage of the best prep materials out there by ordering yours today!

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San Diego Seminar / Relevance, Excellence, Results

Beginning February, 18, 2014, The IIA will offer several multi-day courses at Microtek’s San Diego facility. Plan ahead now to

fulfill your CPE requirements for 2014.

Course Title (click for course description)

Course Code Course Level Duration Dates

Assessing Risk: Ensuring Internal Audit's Value ARV Advanced 2 Feb. 18 -19 Audit Manager Tools and Techniques TTM Intermediate 4 Feb. 18 - 21 Audit Report Writing ARW Basic 2 Feb. 20 - 21 Beginning Auditor Tools and Techniques TT Basic 4 Feb. 18 - 21 Building a Sustainable Quality Program IQA Intermediate 2 Feb. 18 -19 COSO 2013: Implementing the Framework COSO Intermediate 2 Feb. 18 -19 Creative Problem-solving Techniques for Auditors CPS Basic 2 Feb. 20 - 21 Operational Auditing: Influencing Positive Change POA Intermediate 2 Feb. 20 - 21 Performing an Effective Quality Assessment QAE Intermediate 2 Feb. 20 - 21

IIA headquarters has extended their Early Registration Rate to January 24, 2014 for the Inland Empire Chapter. To take

advantage of this savings please contact Customer Relations at +1-407-937-1111 to register.

GROUP DISCOUNTS ARE AVAILABLE. Contact Customer Relations at CustomerRelations@theiia.org or +1-407-937-1111 for

details.

As an added bonus... Attend the next Inland Empire meeting and you may be eligible to win a free copy of The IIA’s CIA Learning System® valued at US $895! The IIA’s CIA Learning System is an interactive print and web-based program that teaches the entire CIA exam syllabus in an interactive and convenient format. It is the first CIA preparation program offering content and questions aligned with the IPPF. For more information or to try a free demo, visit www.LearnCIA.com.

The CIA designation is the only globally accepted certification for internal auditors and remains the standard by which individuals demonstrate their competency and professionalism in the internal auditing field. Since the program’s launch in 1973, it has opened up countless doors of opportunity for practitioners around the world as it communicates their ability to serve as a key player in their organization’s success. Candidates leave the program enriched with educational experience, applicable knowledge, and business tools that can deliver a positive impact in any organization or business environment.

Earning the CIA designation is a valuable accomplishment and a professional advantage for auditors at all stages of their careers, including chief audit executives, audit managers, audit staff, risk management staff, and also students enrolled in an accounting or other business or financial degree program.

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“Q&A with Richard Chambers, President and CEO of The Institute of Internal Auditors” Maurice Gilbert | Corporate Compliance Insights | October 2, 2013

You spent several years as a leader in the military. How did military leadership skills translate into audit leadership and subsequently to your leading the IIA?

Actually, I wasn’t “in the military,” per se. I was a civilian auditor working for the U.S. Army for 21 years. During that time, I had the opportunity to work alongside many great leaders. At one point, I worked directly for General Colin Powell, as head of his command audit program. Having a chance to watch some of our nation’s great leaders reinforced in me the kind of traits and characteristics that it takes to be a leader.

Perhaps some of the most valuable time that I spent around the military was the opportunity that I had to attend a yearlong army war program in Carlisle, Pennsylvania. The program wasn’t about fighting wars or warfare, but about creating strategic thinkers out of military leaders so they can move into positions of greater leadership and responsibility.

What trends have you observed the past 10 years in the audit profession?

Perhaps the most overarching trend is the significant strides that the profession has made in terms of its stature. Ten years ago, we were emerging from an era where internal auditors were viewed largely as a “back office” function, with limited access to the boardroom. Then came the calamities of WorldCom, Enron and all of the other corporate failures around the world. This 10-year odyssey has been one in which internal audit’s value has been recognized both in the corporate governance structure and even to a greater extent by senior management.

I’ve also seen internal audit become more risk-centric. Ten years ago, risk assessment and risk-based audit planning was viewed as a leading practice. Today, it’s very much a fundamental practice, and leading internal audit groups are doing more continuous risk assessment.

During the past 10 years, internal auditors also have made significant strides in our ability to audit business and strategic risks. We’d always been somewhat effective in auditing operational, compliance and financial risks. But as risk management itself has become more sophisticated and matured in a lot of organizations, we’ve had to demonstrate the ability to step up and provide assurance around the overall effectiveness of risk management, particularly as it pertains to business and strategic risks.

As a former auditor myself in public accounting I always thought that the large CPA firms had a flawed model in having inexperienced junior auditors capturing data to be reviewed by the more senior professionals, inclusive of partners. How can a relatively junior auditor have the experience to know if something is fishy? What is your own assessment of this model?

It’s not uncommon for the inexperienced, junior auditors to capture the data. The senior auditors then review the data and do the analysis that allows them — based on their experience and their seasoning — to identify whether there are any areas warranting further review.

Junior auditors can get more experience through active involvement. Rather than having junior auditors capture the data and then hand it off to someone else, it’s preferable that there be more collaborative instruction from the senior auditors to help those who are inexperienced and who haven’t had the opportunity to know how to do the analysis.

What do you see happening in the audit profession three years from now?

The environment around internal auditing is a little like the weather: If you don’t like it, just stick around and it’ll change. What will happen is somewhat speculative. No one predicted in 2001 that by 2004 we’d be neck deep in auditing financial controls. No one projected in 2007 that by 2010 we’d be up to our ears in auditing operations to identify cost efficiencies and effectiveness. Because internal audit is risk-centric, we will follow the risks. And unless someone has a crystal ball and can identify what the risks are going to be in three years, any effort to predict exactly what will happen with the profession is speculative.

That said, I do believe that we are likely to see greater emphasis on providing assurance around the effectiveness of risk management. We are continuing to see enhanced risks around regulatory compliance. And where there are risks, there is apt to be internal auditing because, as I’ve said, internal auditors should be following the risks. We’re also likely to continue the trajectory of greater use of technology.

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“Q&A with Richard Chambers, President and CEO of The Institute of Internal Auditors”

- Article Continued from Page 3 -

The IIA provides a great service to its membership with educational opportunities. What else does the IIA offer its members to further their success individually and to promote the profession as a whole? Perhaps the most valuable service that we provide in terms of fostering professionals’ ability to further their success as individuals is our certification programs, which demonstrate a level of proficiency. We offer the Certified Internal Auditor as well as a series of specialty exams, the newest of which is the Certification in Risk Management Assurance. To date, more than 13,000 individuals have achieved the CRMA worldwide. In terms of promoting the profession as a whole, there’s an entire level of IIA service and commitment that our members may not see on a day-to-day basis. We have very robust advocacy programs, both nationally and globally, and we’re making great strides in reaching out to our key stakeholder groups and raising the awareness about internal auditing. What do you see the role of internal audit is in relationship with the compliance department? The Three Lines of Defense model illustrates this relationship well. The model depicts three groups on which senior management and the board can rely to detect and address risks: 1) operating management, 2) risk and compliance functions and 3) internal audit. The compliance department is a very important element in the second line of defense. It’s one of the important elements of a system of governance, risk management and control that management designs and implements to ensure the mitigation of key risks related to regulatory and other compliance. Internal audit comprises the third line of defense. It’s very important that you have coordination and communication between the second and third lines of defense. If the compliance function is not aware of what the internal audit function is covering, and vice versa, you’re apt to have overlaps in coverage (which is inefficient) or gaps in coverage (which is even worse). When there are gaps in coverage, the two groups are like “ships passing in the night,” each side assuming the other has dedicated resources to address certain elements of risk. You do a considerable amount of public speaking and authoring. What are you most passionate about in your presentations? I’m passionate about the fact that internal auditing is a profession. When internal audit is adequately resourced, given the appropriate level of independence, and given the freedom to carry out its responsibilities, it can bring extraordinary value to the organization that it serves. It’s the hundreds of thousands of internal auditors around the world who inspire me every day by the work they do. You have built the IIA to over 180,000 members throughout the world…do you see additional growth opportunities? If so, what are they? We’re very gratified to have 180,000 members in 190 countries around the world. And we recognize there are opportunities to grow our membership even further. No one knows precisely how many internal auditors there are in the world. But I think it’s safe to say there are more than 1 million. So, there is a significant opportunity to bring additional professional internal audit practitioners into our ranks. Regardless of whether internal auditors chose to belong to The IIA or not, however, they can rest assured that we are representing this profession. The IIA is not only serving its members, but we’re advocating on behalf of the entire internal audit profession. We see huge opportunities in the public sector, where government auditors labor every day as the guardians of public trust to help maintain citizen trust in government. We also see opportunities in the financial services sector, which has been so depleted in recent years in terms of public and shareholder confidence. The IIA will continue to focus our efforts where these opportunities exist. During recent years, we have seen extraordinary progress in developing regions of the world. For example, we have Institutes throughout Africa, where the profession is burgeoning. And currently we’re witnessing the future great economies of the world making the kind of progress that we saw in the western part of the world during the last century. The IIA is positioned to support the internal audit profession in those regions.

Maurice Gilbert founded Corporate Compliance Insights in December, 2008 to further the discussion and professional knowledge exchange of important, forward-thinking corporate governance, risk and compliance topics. Maurice is also the managing partner of Conselium, an executive search firm with core expertise in placing compliance officers, regulatory counsel and audit officers for clients in the U.S., Europe, Latin America and China. Maurice can be reached via email at maurice@conselium.com or by phone at 972-934-8444.

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DID YOU KNOW? The IIA Inland Empire Chapter will share relevant job openings, articles, events, and

ideas on our Website and in our Newsletters for FREE!

Whatever you have to share, we’re happy to help spread the word.

Contact iia_inlandempirechapter@yahoo.com with details for consideration!

Whether you can give a few minutes a week or several hours a month, we are in need of volunteers! We currently have several committee chair opportunities, including HOSPITALITY and COPRORATE & ACADEMIC RELATIONS. Volunteering with our local chapter is a great way to meaningfully give back to the profession, share your unique skills and talents, and work with a committed team of volunteers dedicated to serving our members and increasing awareness of internal auditing. If you’d like more information about either of the vacancies or are interested in helping in some other capacity, please contact us at iia_inlandempirechapter@yahoo.com!

Pictured Left-Right: Chip Clark, IIA Orange County Chapter President, Christy Decker, District #4 Advisor, Larry Herzog Butler, IIA Los Angeles Chapter

President, Carmen McGowin-Paul and Ofelia Tamayo, District #4 Representative

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The IIA Inland Empire Chapter is looking forward to hosting the upcoming half-day fraud and ethics seminar on February 19, 2014. We have an exciting lineup of speakers including: Yvonne Johnson presenting “Ethics – Ethical Awareness” (8a-9a) Yvonne Johnson is a Senior Human Resources Analyst with over 20 years of experience in Human Resources. She has a Bachelor of Art degree in Business Administration from the University of La Verne; and a Master of Public Administration degree from the University of Southern California (USC). She currently works for the County of San Bernardino Office of Compliance and Ethics. She also has experience in Equal Employment Opportunity (EEO), Employee Relations, Employee Benefits, and Recruitment. Yvonne lives in the High Desert, is married, has two children and three grandchildren.

Olivia Robinson, Mark Mermelstein, & David Wall presenting “Strategic Remedies for Fraud Victims” (9a-11a) Olivia Robinson investigates fraud and white collar crime. She has conducted critical, time sensitive investigations since 1982. Ms. Robinson heads up a licensed private investigative agency, comprised of a multidisciplinary team which is unique in in its ability to provide actionable results…using a combination of investigative techniques She has held positions on the boards of the Association of Certified Fraud Examiners, Association for Corporate Growth, and the Association of Strategic Planning. She is an active member of the California Receivers Forum, California Association of Licensed Investigators, and other professional organizations related to corporate governance and the crackdown of domestic and international crime. Mark Mermelstein, a partner in the Los Angeles office, is a member of the White Collar and Corporate Investigations group. Mr. Mermelstein, a trial lawyer with more than 20 first-chair trials, specializes in complex litigation and white collar criminal defense. He represents corporations and individuals facing allegations of securities fraud, healthcare fraud, antitrust violations, environmental crimes, money laundering, violations of the Foreign Corrupt Practices Act (FCPA) and the False Claims Act, mail/wire fraud, embezzlement and anti-competitive behavior. Mr. Mermelstein also focuses on asset recovery for victims of corporate crimes, such as cybercrime, theft of trade secrets, hacking, counterfeiting and other business crimes. Mr. Mermelstein has written many articles and spoken extensively on many aspects of his practice. A frequent commentator on matters related to white collar crime, he has been honored by the Southern California Super Lawyers Magazine as a Southern California Rising Star each year since 2004. David Wall is a Senior Manager at SingerLewak LLP, a 50-year-old accounting and consulting firm headquartered in Los Angeles with six offices throughout the State of California. David has practiced in the field of financial and fraud-related litigation in Southern California for over 20 years. Mr. Wall is a fraud specialist, with credentials as a certified public accountant, certified fraud examiner, licensed private investigator, and licensed attorney. Omid Yazdi presenting “Investigation Best Practices” (11a-12p) Mr. Yazdi is a partner in the Los Angeles office of KPMG LLP’s U.S. Forensic Advisory Services practice. He has over twenty years of international experience assisting KPMG’s clients with financial statement audits, fraud risk management, forensic accounting, economic recovery analysis and litigation advisory services. Mr. Yazdi has served clients in Europe, Asia Pacific, South America, and Africa. Mr. Yazdi has provided in-depth presentations to Board of Directors, the Securities Exchange Commission, the United States Attorney’s Office, the Federal Bureau of Investigation and Securities and Exchange Board of India. Mr. Yazdi's extensive experience includes:

• Leadership role in the investigation of the largest financial fraud in the history of India over a sixth month period. • Led an earnings management investigation of a publicly traded distribution company at the direction of an external law firm, spanning over

two years. • Performed a number of Foreign Corrupt Practices Acts (FCPA) investigations and due diligence assignments of publicly held organizations

domestically and abroad. • Served as a privileged consultant on a litigation matter related to one of the largest financial institutions in the world. • Managed a multi-million dollar inventory theft investigation involving analysis of complex accounting systems, interview of suspect

organization, and execution of forensic technology investigative protocols.

Visit our Chapter Website at www.theiia.org/inlandempire for more information or to register!

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“Good news for internal audit: Bigger budgets, more employees” Neil Amato | CGMA Magazine | November 13, 2013

Optimism in North America for internal audit budget and staffing is at the highest levels since 2008, according to a survey by the Institute of Internal Auditors (IIA). Internal audit is undergoing a change not only in duties such as increased compliance requirements but also in role – for instance, as a contributor to strategic initiatives. Companies are taking steps to make sure internal audit has the necessary staff and resources to take on the expanded role. The percentage of respondents reporting budget and staff numbers increasing or remaining stable is the highest in the history of the IIA survey, which began in 2008. The number of respondents reporting additions to internal audit staff has increased each of the past three years. Eighty-nine per cent of respondents said internal audit’s budget remained the same (52%) or increased (37%) in the past year. That’s up from 83% in 2012, 81% in 2011 and 72% in 2010. Staffing increased at 23% of respondents, up from 21% last year and a low of 17% in 2010. Seventy per cent said staffing levels remained the same, matching the previous survey high set in 2008. Thirty-six per cent of companies predict internal audit budgets to increase, compared with 10% predicting a decrease in the next 12 months. Among Fortune 500 respondents, the numbers were similar: 37% predicted an increase, and 10% predicted a decrease. In staffing projections, Fortune 500 companies were more likely to say they would add staff: 32%, compared with 25% for all respondents. However, 9% of Fortune 500 companies predicted a decrease in internal audit staff, compared with 4% of all respondents. Composition of expected audit plan coverage in 2014 is broken down into the following categories:

• Operational (27%) • Compliance/regulatory (15%) • Financial (11%) • Sarbanes-Oxley testing/support (11%) • Information technology (11%) • Risk-management effectiveness (6%) • Strategic business risks (4%) • Fraud (4%) • Corporate governance (3%) • Other (8%)

Strategic business risks, despite being low in priority, remain a top risk, according to the IIA. The survey shows that 53% of respondents rank strategic business risks among the top five priorities for their audit committee, and 71% say it is a top priority for executive management. “The limited coverage on strategic business risks appears misaligned with respondents’ assessment of the importance of this area to stakeholders,” the survey said.

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President 1st Vice President 2nd Vice President Carmen McGowin-Paul Renee Robinson Ryan Santacruz

Secretary Treasurer Sapna Nangia Rene Casillas

Board of Governors Michael Valinotti, Meihua Koo, Shawn Moore, Samuel Gibbs, Mark Cousineau, Percy Veloro, Michael Alexander, Melissa Bender

CAP Administration Audit Certification Melissa Bender Chad Burkitt Mark Cousineau & Michael Alexander

Hospitality Publicity Acad. & Corp. Relations VACANT Jerry Grau & Thomas Flores VACANT

Membership Website/Newsletter Programs/Seminars Rene Casillas & Percy Veloro Ryan Santacruz & Mindy Chiang Melissa Bender & Carmen McGowin-Paul

Inland Empire Chapter members receive 20% off on all CIA study materials, as well as Gleim CPE (including new ethics course). Contact Melissa Leonard at melissa.leonard@gleim.com or call 1-800-874-5346 x 131 to take advantage of this offer or contact [Chapter contact's name and email/phone] for more details. Visit gleim.com/cia for more information on the CIA Exam or how Gleim can help you pass.

For The Latest Opportunities, Visit the IIA’s Career Center The IIA’s Career Center is a valuable tool available to both members and non-members alike. The resource, which connects job seekers with positions within the internal audit field, is available on the IIA’s website and is provided as a no-cost service to individuals seeking employment. IIA members may post a resume online, which can be viewed by direct employers and agencies. The IIA Career Center is a great source for leads for entry-level and experienced professionals.