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Institute of Internal Auditors proposes changes to its practices framework

The Institute of Internal Auditors (IIA) has proposed enhancements to its International Professional Practices Framework (IPPF) in an effort to respond to the rising expectations on internal auditors.

According to IIA vice president of professional practices Hal Garyn, the expectations on the internal audit globally are increasing. "The attention global internal auditors are receiving from regulators globally and especially in the financial services or banking sector is elevating," he said.
"The heightened expectations on internal audit have placed and will continue to place internal auditors at the corner stone of good governance."

Earlier this year international Integrated Reporting Council chair Mervyn King, speaking at the IIA International Conference 2014 in London, described this evolution and said: "The role of internal auditors is now becoming insightful, they are at the cutting edge of strategy."

Responding to this evolution the IIA set a task force to take a fresh look at its IPPF, Garyn said. "The IPPF encompass all the standards and guidance of the IIA to support the professional practice of internal auditing."

While the proposed changes will not affect the content of the existing elements of the IPPF such as the definition of internal auditing, the code of ethics and the standards, two of the major proposed changes are the introduction of a mission statement and a set of 12 core principles.

The mission statement will give a clear overview of what internal auditing strive to achieve in the organisations it serves, Garyn said. While he believes the definition of internal auditing "does a good job of articulating what internal auditing is", it did not provide a distinct explanation of what it aims to achieve. The proposed mission statement aims to address this short coming.

Looking at the IPPF, the task force realised that while the standards for the professional practice of internal auditing were described as principle-based, the framework did not provide an overview of what those principles were, Garyn explained.

The proposed new set of 12 core principles will aim to highlight what effective internal auditing looks like in practice as it relates to the individual auditor, the internal audit function, and internal audit outcomes.

"It is about providing those charged with governance within their organisations the guidance and leading practices necessary to deliver on internal audit's mission: that of delivering risk-based, objective and reliable assurance, advice and insight," Garyn commented.

The proposed enhancements have been published for a consultation until November 2014. After which if approved by the IIA executive committee and global board, elements of the new framework could be available in the first quarter of 2015. A more fully populated new framework could then be as available sometime in 2016, the IIA announced.

Related link:

Proposed Enhancements to The Institute of Internal Auditors International Professional Practices Framework (IPPF)

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