A brief guide to internal auditing
Internal auditing is an independent, objective assurance and advisory service designed to add value and improve an organisation’s operations
It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes.
Internal auditing strengthens the organisation’s ability to create, protect, and sustain value by providing the board and management with independent, risk-based, and objective assurance, advice, insight, and foresight.
Internal Audit should also monitor that any weaknesses identified are addressed. In this section, we show you how.
Ethical Principles
Internal auditors must comply with the following ethical principles:
- Principle 1 - Integrity - Internal auditors are expected to tell the truth and do the right thing, even when it is uncomfortable or difficult.
- Principle 2 - Objectivity - Internal auditors must maintain professional objectivity when performing all aspects of internal audit services.
- Principle 3 - Competency - Internal auditors must obtain and maintain the competencies to perform their duties successfully.
- Principle 4 - Due professional care - Due professional care requires planning and performing internal audit services with the diligence, judgment, and scepticism possessed by prudent and competent internal auditors.
- Principle 5 - Confidentiality - Internal auditors must respect the value and ownership of information they receive by using it only for professional purposes and protecting it from unauthorised access or disclosure, internally and externally.
Governance
It is essential that Internal Audit is subject to appropriate governance and oversight and that the organisation understands and accepts its responsibilities for ensure that the right conditions have been established for Internal Audit to operate effectively. This means that the following principles must be applied:
- Principle 6 - Internal Audit must be authorised by the Board/ Audit Committee – through a mandate and internal audit charter
- Principle 7 - Must be positioned independently- reporting to the Board/ Audit Committee and able to operate without interference
- Principle 8 - Overseen by the Board/ Audit Committee – reporting internal audit planning, assignment results, quality assurance improvements, External Quality Assessment.