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Proposed new guidance outlines 12 principles for internal auditing

Proposed new guidance outlines 12 principles for internal auditing

Proposed changes to guidance followed by internal auditors include a
new mission statement and a set of 12 core principles that highlight
what effective internal auditing looks like in practice.

The Institute of Internal Auditors (IIA) on Monday announced the
proposed changes to the International Professional Practices
Framework
, which is promulgated by the IIA. The framework
essentially is a blueprint supporting effective internal auditing.

The proposed new mission statement states that in each respective
organization, internal audit strives “to enhance and protect
organizational value by providing stakeholders with risk-based,
objective and reliable assurance, advice and insight.”

Adding the proposed principles would give the framework an element
that has not existed previously. Although the IIA’s standards always
have been considered principles-based, those principles have not
previously been articulated in the framework.

The task force that proposed the update concluded that the 12
principles, taken as a whole, articulate internal audit effectiveness.
For an internal audit function to be considered effective, all 12
principles must be present and operating effectively, according to the
task force.

Under the proposed core principles, an internal auditor or internal
audit function would:

“I truly believe the proposed enhancements, especially the new
principles, will be of significant value to practitioners worldwide,”
Robert Hirth, CPA (inactive), chair of the task force that created the
proposal, said in a news release.

The proposed changes would not affect the content of existing
elements of the framework, such as the definition of internal
auditing, the Code of Ethics, or the Standards for the
Professional Practice of Internal Auditing
. But the standards
are constantly under evaluation and could be revised to support the
proposed framework revisions.

The task force also proposes creating an emerging issues guidance
category to assist practitioners to quickly address emerging trends,
changing stakeholder expectations, identified regulatory or
legislative concerns, and new topical issues. This guidance would be
developed and issued with minimal delay.

In addition, the task force that produced the proposed update
recommends restructuring guidance elements of “practice advisories”
and “practice guides” to better reflect their intent. This would
include renaming them, respectively, as “implementation guidance” and
“supplemental guidance.”

Under this new structure, the content of existing practice guides and
practice advisories would not be eliminated, but the IIA envisions
revising, reissuing, or replacing them over time.

The proposal
is available on the IIA’s website. The organization is seeking
comments by Nov. 3. If approved by the IIA Executive Committee and
Global Board following the exposure period, elements of the new
framework could be available in the first quarter of 2015, and a new
framework could be available in 2016.


Ken Tysiac (

ktysiac@aicpa.org
) is a JofA editorial director.

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