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CIAF events

Upcoming events

I regret to advise you that we have had to cancel the event which was due to take place on 7 December in Leeds due to unforeseen circumstances. We hope to hold our next event in May next year in London which should cover the same topics.

For further details of this meeting or future CIAF events please e-mail either the Chairman of the CIAF, Mohammed Taj at mohammed.taj@shepherd-group.com or the Secretary, Katy Kinane at katy.kinane@shepherd-group.com

The CIAF has been set up specifically to address the concerns and needs of audit professionals in the construction industry. If you have any suggestions of future topics we would be pleased to hear from you.

Volunteer speakers/venues
Given the breadth of experience of our members we are keen to ensure that best practice is shared in order to enhance our knowledge. In addition, we can keep costs of events to a minimum and hence increase attendance if we have volunteer speakers. Therefore if you, or a member of your organisation, could speak on a particular topic please contact either Mohammed Taj or Katy Kinane (see above for contact details) in the first instance. Any offers of venues in which to hold future events would also be greatly appreciated. 

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October 2011 event overview

The Construction Internal Audit Forum (CIAF) in affiliation with the Institute of Internal Auditors (IIA) held its second event of 2010 at KPMG’s office in Birmingham on the 20th October, 2010.  The event was chaired by Mohammed Taj, Director of Group Audit & Assurance at Shepherd Group and covered a number of topics of relevance to the Internal Auditors in the construction industry.

The two main topics covered at the event are as follows :-

• How to manage a fraud investigation 
• Post contract review

In addition there was a networking session designed to introduce participants to each other and instigate discussions.  Feedback from participants at the event was extremely positive.

How to manage a fraud investigation

The presentation commenced with a brief overview of a number of useful topics including :-
 

• The impact that fraud has on businesses;
• The definition of fraud;
• The United Kingdom Fraud Act; and
• Defining financial misreporting, impropriety and fraud.
   

The bulk of the presentation covered the investigation of frauds and potential pitfalls.  A particularly useful topic was best practice guidance around the protection and collection of evidence.

The presentation concluded with a lively question and answer section covering a number of areas including whistleblowing processes.

Networking

A useful networking session was introduced to facilitate the introduction of participants to each other, cover common issues and explore areas that future CIAF meetings could cover.

Post Contract Review

The afternoon session covered auditing contract delivery and after a brief introduction a simple case study was introduced based on a real life example.  The participants split into teams to review different aspects of the real life scenario and a number of questions were posed.  A number of lively debates followed and the highly participative session was well received.  A number of practical techniques for auditing contracts were shared.

The session concluded with a useful question and answer session. 

 

 

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April 2010 event overview 
 
The Construction Internal Audit Forum (CIAF) in affiliation with the Institute of Internal Auditors (IIA) held its 4th event at the office of Pricewaterhouse Coopers in Leeds on the 20th April, 2010.  The event was chaired by Mohammed Taj, Director of Group Audit & Assurance at Shepherd Group.

There were two topics covered at the event as follows :-

- Supply Chain Management; and
- Auditing Private Finance Initiative (PFI) and Joint Venture (JV) Contracts.

In addition there was a networking session designed to introduce participants to each other and instigate discussions.

The Chairman Mohammed Taj opened the event by welcoming everyone and set out a brief overview of the day.

Supply Chain Management
Simon Watkins of KPMG gave an interesting presentation detailing some of the key supply chain risks that are facing companies in the current environment.   Some of the key themes discussed were the increasing use of international supply chains and the importance of effective supplier relationship management.

The session continued with  a short presentation covering emerging trends in the procurement of Agency labour and highlighted some areas to be mindful of which included :-

- The tax treatment of termination payments;
- The upcoming Agency Workers Directive; and
- A recent case where an off shore trust was used to pay agency workers (known as the Montpelier case).

The session concluded with a useful question and answer session.

Networking
A networking session was introduced to facilitate the introduction of participants to each other.  The delegates were split into small groups and discussions were held to introduce each delegate to the group and to raise areas of common concern such as emerging risks.  Feedback was also sought on the effectiveness of the CIAF together with any areas that delegates wanted covering at future events.

Auditing Private Finance Initiative (PFI) and Joint Venture (JV) Contracts

This session was presented by Andy Ward of Pricewaterhouse Coopers who gave an interesting presentation which commenced with a slide which illustrated the complex nature of the contractual frameworks for PFI contracts.  The importance of understanding and documenting the contractual framework for a PFI contract before commencing audit work was emphasised.

An explanation of the guidance used to determine asset ownership in PFI contracts was covered, before the presentation moved on to the treatment of bid costs.  The key message was that Auditors need to understand how the bid costs have been treated and whether it is appropriate.

Andy then moved on to consider JV contracts and in a similar way to understanding contractual frameworks in PFI contracts the importance of understanding Shareholder agreements was stressed. 

Another area highlighted for the Auditor to consider was the completeness of JV costs, for example those costs charged to the JV from the partners.  The presentation concluded with a couple of areas that often need to be reviewed, mainly letters of support from the JV partners and related party transactions.

The session concluded with a useful question and answer session.  The presentation slides are available to anyone interested from the IIA –UK.

Summary
The next CIAF event will be held in October 2010 in Birmingham.  Planned topics are post contract review and management of a fraud investigation. Details of the event and how to book a place will be available in due course via the IIA. 

For further details of this meeting or future CIAF events please e-mail either the Chairman of the CIAF, Mohammed Taj at mohammed.taj@shepherd-group.com or the Secretary, Katy Kinane at Katy.kinane@shepherd-group.com

Alternatively please visit the CIAF web page, available via a link from the IIA special interest group’s web page, which contains further details of the aims and objectives of the CIAF, the opportunity to register an interest in the CIAF and receive details of future events and an overview of recent events.

Volunteer speakers / venues

Given the breadth of experience of our members we are keen to ensure that best practice is shared in order to enhance our knowledge. In addition, we can keep costs of events to a minimum and hence increase attendance if we have volunteer speakers. Therefore if you, or a member of your organisation, could speak on a particular topic please contact either Mohammed Taj or Katy Kinane (see above for contact details) in the first instance.  Any offers of venues in which to hold future events would also be greatly appreciated.
 

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Autumn 2009 event overview 

 

The Construction Internal Audit Forum (CIAF) in affiliation with the Institute of Internal Auditors (IIA) held its 3rd event on 12 October 2009 at Ernst and Young’s offices in London. There were two topics for discussion; types of contracts and associated risks and auditing projects in an economic downturn. In addition there was a speed networking session designed to introduce participants to each other and instigate discussions.

The Chairman Mohammed Taj opened the event by welcoming everyone and set out a brief overview of the day.

The day was chaired by Leigh Wiseman, a Risk Manager for HMRC.  Leigh explained the concept of the CIAF, being an opportunity for professionals working in the construction industry to meet and discuss relevant topics.  The CIAF has a small committee of volunteers so we are looking for additional volunteers to sit on the committee as well suggestions for future events.

Types of Contracts and Associated Risks
Richard Randall, a Senior Manager within Ernst and Young Advisory Services gave an excellent talk on various types of contract and the management of risk within these contracts.

Initially Richard talked about risk in general and basic principles such as allocating risk to the party best able to manage it and the distinction between risk and consequence which is not brought out in a contract.  Richard then discussed the various contracting options between lump sum turnkey to construction management indicating the different level of risk to client and employer associated with each option.  However it was clear that however the risk is allocated both parties should be working together to ensure risk is managed as both parties are affected by any negative events in terms of costs and reputation.

The contract types discussed in detail were JCT with contractors design, NEC3, PPC2000 and JCT – major design.  For each of these contract types Richard talked about the pros and cons together with the key risks for the contractor.

The value of internal audit was reviewed and how audit can assist the business in communicating and developing good risk management practices, wrapping up with a look at the Olympic Delivery Authority’s (ODAs) approach to risk management.

Speed Networking
A speed networking session was introduced to facilitate the introduction of participants to each other.  A five minute one to one discussion took place before it was time to change seats to introduce yourself to another participant. There were four individual sessions with the exchange of business cards and the opportunity to chat to someone who under normal circumstances you may not have had the chance to speak to.  This was a light hearted session to get rid of the after lunch fatigue but proved popular and generated a great deal of debate.

Auditing Projects in an Economic Downturn
This session was jointly presented by Mohammed Taj, Director of Group Audit & Assurance at Shepherd Group and Jed Turnbull, Director at KPMG.

Mohammed started the session by introducing the impact of the downturn on the Internal Audit Departments. This considered the expectations on Internal Audit, budget constraints as well as some of the actions that an audit department should be considering.  Areas of discussion were refreshing the audit universe, prioritising audits and the need to add value and focus our resources.

Jed went on to discuss some of the risks facing an organisation during an economic downturn.  Jed had specifically considered the risks facing an organisation within the construction industry; these were split between strategic, commercial and financial risks.

Mohammed Taj  then lead a breakout session where the discussions were about i) How are risks mitigated? ii) What has changed in audit approach / plan? and iii) How are you preparing for the rebound?

The feedback from the breakout session confirmed some of the issues raised during the earlier presentations, in that more focus was being placed on risk management and a risk based approach to audit methodology. The audit plans are being reviewed and prioritised on an ongoing basis. The audit coverage was being widened and this was having some adverse impact on the overall assurance, which was being highlighted to the Audit Committees. In general Internal Audit departments were being expected to do more with less, which means that they must become more effective and efficient and to make best use of audit tools. However, it was encouraging to see that in most companies the economic downturn did not necessarily result in downsizing of the Internal Audit functions.

Summary