IIA plans to overhaul internal audit standards


The Institute of Internal Auditors will soon be unveiling extensive changes in its standards, including a name change.

In an email Thursday, the IIA said it would be making the proposed new standards available for review and public comment from March 1 through May 30, starting with English, with translations into a variety of languages also coming. The organization is encouraging internal auditors and other stakeholders to read the complete draft of the new standards when it’s available on March 1 and provide their feedback and comments by taking a survey.

One of the changes involves the name, with the International Standards for the Professional Practice of Internal Auditing being renamed the Global Internal Audit Standards.

Institute of Internal Auditors headquarters in Florida

There will also be a new structure, with content from six elements of the current International Professional Practices Framework (mission, definition, code of ethics, core principles, standards and implementation guides) all incorporated into the Global Internal Audit Standards and organized into five domains to more clearly indicate the main roles and responsibilities: the purpose of internal auditing, ethics and professionalism, governing the internal audit function, managing the internal audit function and performing internal audit services.

Each of the Global Internal Audit Standards will have new sections describing the requirements of the standard along with considerations for implementing the requirements and providing evidence of conformance with the requirements. The “considerations for implementation” will include common and preferred practices for the requirements, and the “considerations for evidence of conformance” will provide examples of recommended ways to demonstrate the requirements have been implemented. The sections will incorporate information from the IIA’s existing implementation guides and other authoritative guidance, as well as the particular nuances for the public sector and small internal audit functions where appropriate.

The Purpose of Internal Auditing — the first domain in the new standards — will incorporate the Mission of Internal Audit and the Definition of Internal Auditing, and for the first time, discuss how internal auditing helps an organization serve the public interest.

The IIA’s Code of Ethics has been incorporated into the Ethics and Professionalism domain of its proposed standards. In addition, this domain contains standards on due professional care, professional skepticism, and minimum requirements for continuing professional development for all internal auditors. 

The new definition and use of the term “board” and the board’s role in governing the internal audit function has been clarified in the proposed standards. Board responsibilities related to the internal audit function, which were implied or indirectly stated in the existing standards, are stated more directly and clearly. These include responsibilities related to oversight of the performance of the chief audit executive and the internal audit function, including external quality assessments. 

There are new clarifications and requirements for the quality assurance and improvement program, including a description of the requirements for board oversight of the program and the requirement for at least one reviewer in an external quality review to be a Certified Internal Auditor.

“Public sector” is now defined in the proposed standards glossary, and the new “considerations for implementation” section specifically discusses information to help internal auditors in the public sector.

“The public interest was considered intentionally when creating the new standard-setting process and the Purpose of Internal Auditing, as well as when updating other standards to consider stakeholders,” said the IIA.

To provide clarity, the proposed Standards introduce and define terms, such as “criteria,” “condition,” “finding,” “inherent risk,” “residual risk,” “risk tolerance,” and “root cause,” commonly used when performing internal audit services, in the revised and expanded glossary.

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