INTERNAL AUDITING
Mission of Internal Audit Mandatory Guidance
Core Principles Standards Code of Ethics
Definition of Internal Auditing Implementation Guidance
Supplemental Guidance
By: Norol-janah S. Goling, CPA, MA-IA
Mission of Internal Audit
• The Mission of Internal Audit articulates what internal
audit aspires to accomplish within an organization. Its
place in the New IPPF is deliberate, demonstrating how
practitioners should leverage the entire framework to
facilitate their ability to achieve the Mission.
• To enhance and protect organizational value by providing
risk-based and objective assurance, advice, and insight.
Mandatory Guidance
• The International Professional Practices Framework
(IPPF)® is the conceptual framework that organizes
authoritative guidance promulgated by The Institute of
Internal Auditors. A trustworthy, global, guidance-setting
body, The IIA provides internal audit professionals
worldwide with authoritative guidance organized in the
IPPF as mandatory guidance and recommended
guidance.
Core Principles
• The Core Principles, taken as a whole, articulate internal
audit effectiveness. For an internal audit function to be
considered effective, all Principles should be present and
operating effectively.
Standards
• International Standards for the Professional Practice of Internal
Auditing (Standards)
• Standards are principle-focused and provide a framework for
performing and promoting internal auditing. The Standards are
mandatory requirements consisting of:
• Statements of basic requirements for the professional practice of
internal auditing and for evaluating the effectiveness of its
performance. The requirements are internationally applicable at
organizational and individual levels.
• Interpretations, which clarify terms or concepts within the statements.
• Glossary terms.
• It is necessary to consider both the statements and their
interpretations to understand and apply the Standards correctly.
The Standards employ terms that have been given specific meanings
as noted in the Glossary, which is also part of the Standards.
Code of Ethics
• The Code of Ethics states the principles and expectations
governing the behavior of individuals and organizations in
the conduct of internal auditing. It describes the minimum
requirements for conduct, and behavioral expectations
rather than specific activities.
Code of Ethics — Principles
• Internal auditors are expected to apply and uphold the following
principles:
• Integrity
The integrity of internal auditors establishes trust and thus provides
the basis for reliance on their judgment.
• Objectivity
Internal auditors exhibit the highest level of professional objectivity in
gathering, evaluating, and communicating information about the
activity or process being examined. Internal auditors make a balanced
assessment of all the relevant circumstances and are not unduly
influenced by their own interests or by others in forming judgments.
• Confidentiality
Internal auditors respect the value and ownership of information they
receive and do not disclose information without appropriate authority
unless there is a legal or professional obligation to do so.
• Competency
Internal auditors apply the knowledge, skills, and experience needed
in the performance of internal audit services.
Rules of Conduct
Integrity
Internal auditors:
1.1. Shall perform their work with honesty, diligence, and
responsibility.
1.2. Shall observe the law and make disclosures expected
by the law and the profession.
1.3. Shall not knowingly be a party to any illegal activity, or
engage in acts that are discreditable to the profession of
internal auditing or to the organization.
1.4. Shall respect and contribute to the legitimate and
ethical objectives of the organization.
Objectivity
Internal auditors:
2.1. Shall not participate in any activity or relationship that
may impair or be presumed to impair their unbiased
assessment. This participation includes those activities or
relationships that may be in conflict with the interests of the
organization.
2.2. Shall not accept anything that may impair or be
presumed to impair their professional judgment.
2.3. Shall disclose all material facts known to them that, if
not disclosed, may distort the reporting of activities under
review.
Confidentiality
Internal auditors:
3.1. Shall be prudent in the use and protection of
information acquired in the course of their duties.
3.2. Shall not use information for any personal gain or in
any manner that would be contrary to the law or detrimental
to the legitimate and ethical objectives of the organization.
Competency
Internal auditors:
4.1. Shall engage only in those services for which they
have the necessary knowledge, skills, and experience.
4.2. Shall perform internal audit services in accordance
with the International Standards for the Professional
Practice of Internal Auditing.
4.3. Shall continually improve their proficiency and the
effectiveness and quality of their services.
Definition of Internal Auditing
• Internal auditing is an independent, objective assurance
and consulting activity designed to add value and improve
an organization's operations.
Implementation Guidance
• Implementation Guides assist internal auditors in applying
the Standards and Code of Ethics. They collectively
address internal auditing's approach, methodologies, and
consideration, but do not detail processes or procedures.
Supplemental Guidance
• Supplemental Guidance provides detailed guidance for
conducting internal audit activities. These include topical
areas, sector-specific issues, as well as processes and
procedures, tools and techniques, programs, step-by-step
approaches, and examples of deliverables.
