Greater awareness of these public goods might help, at least a little, in closing the public perception gap. A more promising approach is “personalised framing”. This links a policy intervention to the specific circumstances of an individual or set of individuals. For example, experimental trials suggest people are more likely to pay taxes or donate to charity if they are told about the local or personal impact of doing so. 43  Personalising a message in this way increases the changes of it being heard, understood and acted on. What would be the monetary policy equivalent? Imagine a personal monetary policy scorecard, similar in spirit to a personal tax scorecard, tailored to an individual’s characteristics – assets and liabilities, housing 39  For example, Ford (2016). The Behavioural Insights Team are specialists in this area, see Halpern (2015) for a discussion of their methodologies. 41 For example, Hallsworth et al (2014). 42 Barnes et al (forthcoming) and Sheffield Political Economy Research Institute (2015). 43 Agerström et al (2016), Service et al (2014). 40  15  All speeches are available online at www.bankofengland.co.uk/speeches  15  tenure, age, employment status etc. This would identify the channels and the amounts by which a significant change in monetary policy affected people’s finances (income, wealth) and wider well-being (employment and financial security). Now stop imagining. Figure 1 shows such a scorecard for the contribution of monetary policy since the crisis for the average UK household. In the upper part, it quantifies the annual impact on the average household’s finances.
Amid the changes in the financial landscape, there have been equally significant developments in the auditing standards both globally and locally. The standards and regulations are becoming increasingly tighter and more stringent. The Institute of Internal Auditors (IIA) for example, has proposed several changes to the Internal Audit Standards, which are expected to take effect in January 2017. The changes to the Standards are aimed at reinforcing the fundamental principles of internal auditing practices, promoting a broad range of value-added internal auditing and fostering improved organisational processes and operations. The direction of changes in the financial reporting standards also places more accountability on the Audit Committees to provide strong oversight on the organisation’s financial reporting and internal controls. The new Companies Bill 2015 (the Bill) was passed by the Dewan Rakyat and is anticipated to come into force by end-2016. The new law is expected to bring major reforms to our corporate landscape and will place greater pressures on the audit function to understand the emerging regulatory requirements and their impact on business operations. In the wake of uncertainties due to the global developments, the change in regulatory standards and technological advancement require businesses and regulators to think beyond conventional norms in order to navigate through these unchartered waters. Turning to the theme today, the importance of an independent and effective internal audit function as a core line of defense with a strong Audit Committee in business cannot be overemphasized.