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.
Source: Journal of Accountancy
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