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Friday, 1 March 2013

Is your CAE managing the internal audit activity effectively


Vanilla internal auditing is my view of internal auditing which is practised in accordance to the mandatory IPPF guidance, that is, the definition of internal auditing, the code of ethics and the Standards (http://bit.ly/15JJsPK).

“The chief audit executive must effectively manage the internal audit activity to ensure it adds value to the organization.” Standard 2000

I wonder how many audit committees use this Standard to evaluate whether the CAE is effectively managing the internal audit activity and if they do, whether they use the criteria specified in the interpretation to the Standard.

Tuesday, 26 February 2013

The QAIP, internal and external assessments


Vanilla internal auditing is my view of internal auditing which is practised in accordance to the mandatory IPPF guidance, that is, the definition of internal auditing, the code of ethics and the Standards (http://bit.ly/15JJsPK).

All organisational units, including the internal audit activity, have objectives to achieve. Internal auditing believes that the best way to do so is through adequate, efficient and effective governance, risk management and control processes.

Where advice is required on the processes, internal audit consulting is indicated and where an organisational unit has cause to believe through its internal assessments that it does have adequate, efficient and effective governance, risk management and control processes, an external assessment to that organisational unit itself, (external assessor for the internal audit activity and internal audit activity for the other organisational units), should be conducted to provide an independent opinion thereon.

Monday, 25 February 2013

The exercise of due professional care


Vanilla internal auditing is my view of internal auditing which is practised in accordance to the mandatory IPPF guidance, that is, the definition of internal auditing, the code of ethics and the Standards (http://bit.ly/15JJsPK).

In dealing with due professional care, (1220 group of Standards) most internal auditors never fail to note the disclaimers implicit in the exercise of due professional care, but not whether and how they have exercised the positive actions required by due professional care.

Wednesday, 20 February 2013

Internal audit proficiency


Vanilla internal auditing is my view of internal auditing which is practised in accordance to the mandatory IPPF guidance, that is, the definition of internal auditing, the code of ethics and the Standards.

On the evidence of the expected duties of prospective internal auditors given in job advertisements, different organisations have different perceptions of what the ideal proficiency of internal auditors should be. These expectations are mostly based on the roles the organisations expect internal auditors should fulfill, rather than the responsibilities imposed by the mandatory IPPF guidance.

The IIA released a Competency Framework some years ago which I have updated to incorporate the recent revision of the Standards applicable from this year. This is available on http://bit.ly/XvZW9d.

Monday, 18 February 2013

Independence and objectivity


Vanilla internal auditing is my view of internal auditing which is practised in accordance to the mandatory IPPF guidance, that is, the definition of internal auditing, the code of ethics and the Standards.

The second sentence of Standard 1010 says, “The chief audit executive should discuss the Definition of Internal Auditing, the Code of Ethics, and the Standards with senior management and the board.” 

Especially with reference to independence and objectivity, it is non-conformance with this Standard that results in problems between the internal audit activity on the one hand and senior management and the board on the other.

Wednesday, 13 February 2013

Chief Audit Executive responsibilities



Vanilla internal auditing is my view of internal auditing which is practised in accordance to the mandatory IPPF guidance, that is, the definition of internal auditing, the code of ethics and the Standards.

In the last post I suggested an Annexure to the internal audit charter detailing the responsibilities of the Chief Audit Executive. It should contain all those things which the Standards make it mandatory for the Chief Audit Executive to do. Here it is:

Tuesday, 12 February 2013

Is your internal audit charter good enough?


Vanilla internal auditing is my view of internal auditing which is practised in accordance to the mandatory IPPF guidance, that is, the definition of internal auditing, the code of ethics and the Standards.

A lot of problems internal auditors come up against have a lot to do with the internal audit charter. Most of the time not enough attention is paid to its drafting and even more, there does not seem to be an understanding that for one to draft a good enough internal audit charter, one has to understand the Standards really well.