Internal Audit Standards

Internal audit is a very crucial part of the audit process. It has a standardized procedure that provides essential backbone support to the main audit. A value oriented internal audit is the requirement that lends the essential efficiency to the audit. Understanding and adherence to the standards provides a stronger chance of effective internal audit execution. This webinar takes into account the need of the standards, the standards, and how to execute the standards in the different sessions. It also touches precisely on what could be the risks of if the negligence in the standards. The details covered in the sessions are as follows:

Session: Internal Auditor Standards Part 1

Corporate management personnel often are not aware that internal auditors have standards and guidelines defined by the profession. Internal Audit (IA) is not always seen as those who must follow established professional standards. Internal auditors don’t have a “license to practice”. So why do we need Standards?

A value oriented IA function will have an understanding of the International Professional Practices Framework (IPPF) Standards and be able to articulate their importance to management. Absence of acknowledgement of the Standards infers the group is a quality assurance function. That may be what the organization wants, but they should be able to differentiate.

This session will delve deeper into the major components of the Standards and their meaning to the profession.

Session: Internal Auditor Standards Part 2 - Managing Internal Audit Work

As a profession, internal auditors look to the Institute of Internal Auditors (IIA) Standards to provide guidance on how to most effectively execute their fiduciary role. Part One of this series introduced the overall Standards, Mandatory Guidelines, Core Principles, Code of Ethics and Attribute Standards. These are important concepts that internal auditors, management and the board should understand. These guidelines provide the foundation for the profession and are written to ensure effectiveness and consistency in the execution of internal auditing.

This segment will focus on two elements of the Performance Standards which include: managing the internal audit function and the nature of work considered within the realm of internal auditing. Each of these components are critical to the effective execution of internal audit’s responsibilities.

Requirements for managing internal audit extend far beyond managing a specific project or individual audit. It includes management of the entire audit process from development through to execution and reporting. It also includes:

• Ensuring the team has the relevant knowledge and expertise for engagement assignments
• Appropriate resourcing and budgeting exists to support the Mission of the function
• Establishing the right communication protocols with management and the board.

When examining the nature of work of internal audit, the Institute of Internal Auditors Standards outline three very critical areas that internal auditors should be engaged with.

These include:

• Controls
• Risk Management
• Governance

Inherently, most individuals within management understand the requirements around internal audit’s evaluation of controls, but many struggle with how or if internal audit should be involved in risk management and governance activities.

This course delves deeper into managing the internal audit activity and the challenges that may be faced along with properly identifying internal audit's nature of work. The participant will come away with an appreciation for the intent of the Standards and a recognition of alternatives to promoting the value oriented activities internal audit can provide to an organization.

Session: Internal Auditor Standards Part 3

Sessions One and Two covered important aspects internal auditors should be aware of in relation to the Institute of Internal Auditors (IIA) Attribute Standards and the elements of the Performance Standards that related to managing the internal audit function and the nature of work for internal audit. The final elements of the Performance Standards provide internal auditors with a relevant framework to properly execute engagements. It is critical internal auditors have an understanding of the various aspects of the audit and the framework outlined by the IIA.

Although the Standards do provide specific templates on the elements that should be evaluated in each stage of the audit, they provide critical guidance on requirements internal auditors should consider during the various phases. Understanding and following this guidance will ensure audit engagements are executed consistently and effectively. This segment is designed to delve deeper into the Performance Standards as they relate to conducting internal audit projects. This includes:

• Engagement Planning
• Performing the Engagement
• Communicating Results
• Monitoring Progress
• Communicating the Acceptance of risks