The IIA’s Mission of Internal Audit, Definition of Internal Auditing, and Core Principles for the Professional Practice of Internal Auditing, and the purpose, authority, and responsibility of the internal audit activity

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The Institute of Internal Auditors (IIA) is the global professional association of internal auditors. It provides guidance, standards, and certification for the internal audit profession. In this blog post, I will interpret the IIA’s mission of internal audit, definition of internal auditing, and core principles for the professional practice of internal auditing, and explain the purpose, authority, and responsibility of the internal audit activity.

The mission of internal audit is to enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight. This means that internal auditors help organizations achieve their objectives by evaluating and improving the effectiveness of governance, risk management, and control processes. Internal auditors also provide recommendations and guidance to management and other stakeholders on how to address risks and opportunities. Internal auditors act as trusted advisors and catalysts for positive change in the organization.

The definition of internal auditing is a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. This means that internal auditing is a structured and rigorous process that follows a methodology and standards. Internal auditing involves collecting and analyzing evidence, forming opinions and conclusions, reporting and communicating results, and following up on actions. Internal auditing covers all aspects of the organization’s operations, including financial, operational, compliance, strategic, and reputational aspects.

The core principles for the professional practice of internal auditing are the fundamental values that guide the conduct and performance of internal auditors. They are:

– Demonstrates integrity: Internal auditors are honest, ethical, and trustworthy. They adhere to the IIA’s Code of Ethics and avoid conflicts of interest.
– Demonstrates competence and due professional care: Internal auditors have the knowledge, skills, and experience to perform their work with diligence and quality. They follow the IIA’s International Standards for the Professional Practice of Internal Auditing (Standards) and engage in continuous learning and improvement.
– Is objective and free from undue influence (independent): Internal auditors are impartial and unbiased in their work. They are not influenced by personal or organizational interests or pressures. They report directly to an appropriate level of authority that allows them to perform their work effectively.
– Aligns with the strategies, objectives, and risks of the organization: Internal auditors understand the organization’s vision, mission, goals, and risks. They align their work with the organization’s priorities and needs. They provide assurance and advice that is relevant and valuable to the organization.
– Is appropriately positioned and adequately resourced: Internal auditors have sufficient authority, resources, and support to perform their work. They have access to information, people, and systems that are necessary for their work. They have adequate staff with appropriate qualifications and competencies.
– Demonstrates quality and continuous improvement: Internal auditors strive for excellence in their work. They apply a quality assurance and improvement program that ensures compliance with the Standards and enhances the effectiveness and efficiency of their work. They seek feedback from stakeholders and incorporate lessons learned into their work.
– Communicates effectively: Internal auditors communicate clearly, timely, accurately, and constructively with stakeholders. They use appropriate methods and tools to deliver their messages. They listen actively and respectfully to others’ views and opinions.
– Provides risk-based assurance: Internal auditors provide assurance on the organization’s risk management process. They assess whether risks are identified, assessed, treated, monitored, and reported in accordance with the organization’s risk appetite and framework. They also assess whether controls are designed and operating effectively to mitigate risks.
– Is insightful, proactive, and future-focused: Internal auditors provide insight on emerging issues and trends that may affect the organization. They anticipate potential risks and opportunities for improvement. They advise management on how to prepare for the future.
– Promotes organizational improvement: Internal auditors contribute to the enhancement of organizational value by identifying areas for improvement in governance, risk management, and control processes. They facilitate positive change by providing recommendations that are feasible, cost-effective, and beneficial to the organization.

The purpose of the internal audit activity is to provide independent, objective assurance
and consulting services designed to add value
and improve an organization’s operations.

The authority of the internal audit activity is derived from its charter,
which is approved by senior management
and the board or its equivalent.

The responsibility of the internal audit activity is to
and report on its engagements
in accordance with its charter,
the Standards,
and applicable laws
and regulations.

In conclusion,
the IIA’s mission, definition, and core principles provide a framework, for the professional practice of internal auditing.
They define what internal auditing is,
why it exists, and how it should be performed.
They also reflect the expectations, and responsibilities, of internal auditors and their stakeholders.