1 international standards for the professional practice of internal auditing urton anderson, phd,...

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International Standards for the Professional Practice

of Internal Auditing

Urton Anderson, PhD, CIAChairman – The Internal Auditing Standards Board

The Institute of Internal Auditors

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Agenda

..•Internal Audit Standards and Guidance

•International Professional Practices Framework (IPPF)

•International Standards for the Professional Practice of Internal Auditing

•The IIA’s Standard Setting Process

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IA Standards and Guidance

• Code of Ethics - 1968• Standards - first issued 1978• Professional Practices Framework

- 2000• International Professional Practices

Framework – January 2009

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International Professional Practices Framework (IPPF)

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Definition

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

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Code of Ethics

• 4 Principles– Integrity– Objectivity– Confidentiality– Competency

• 12 Rules

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The International Standards

• Mandatory requirements consisting of:– Statements of basic requirements for

professional practice of internal auditing

– Interpretations which clarify terms or concepts within the Statements.

– Glossary

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The International Standards

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Standards

• Approved translation – 32 languages• Increasingly recognized by legislation

and regulation– GAO “Yellow Book”– Texas Internal Auditing Act – Canadian Federal Government– South Africa

• National Treasury requires their use in public sector

• King report requires for listed companies

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Compatibility

• Comparison with GAO “Yellow Book” Standards– Aligned with performance auditing

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Non-mandatory Guidance

• Practice Advisories

• Practice Guides

• Position Papers

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The IIA’s Guidance Setting Process

• Guidance set by IIA Technical Committees– Internal Auditing Standards Board– Ethics Committee– Professional Issues Committee– Advance Technology Committee

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The IIA’s Standard Setting Process

• Internal Auditing Standards Board– Standards reviewed every 3 years– Changes requires public exposure in

English, French and Spanish• 90 day exposure period

• Standard Oversight Committee– Majority stakeholders

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The Institute of Internal AuditorsGlobal Headquarters

www.theiia.org

Urton Andersonurton.anderson@mccombs.utexas.edu

Margie Poposky BastollaMargie.Bastolla@theiia.org