1 International Standards for the Professional Practice of Internal Auditing Urton Anderson, PhD, CIA Chairman – The Internal Auditing Standards Board The Institute of Internal Auditors

2 Agenda. Internal Audit Standards and Guidance International Professional Practices Framework (IPPF) International Standards for the Professional Practice of Internal Auditing The IIA’s Standard Setting Process

3 IA Standards and Guidance Code of Ethics Standards - first issued 1978 Professional Practices Framework International Professional Practices Framework – January 2009

4 International Professional Practices Framework (IPPF)

5 Definition Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

6 Code of Ethics 4 Principles –Integrity –Objectivity –Confidentiality –Competency 12 Rules

7 The International Standards Mandatory requirements consisting of: –Statements of basic requirements for professional practice of internal auditing –Interpretations which clarify terms or concepts within the Statements. –Glossary

8 The International Standards

9 Standards Approved translation – 32 languages Increasingly recognized by legislation and regulation –GAO “Yellow Book” –Texas Internal Auditing Act –Canadian Federal Government –South Africa National Treasury requires their use in public sector King report requires for listed companies

10 Compatibility Comparison with GAO “Yellow Book” Standards –Aligned with performance auditing

11 Non-mandatory Guidance Practice Advisories Practice Guides Position Papers

12 The IIA’s Guidance Setting Process Guidance set by IIA Technical Committees –Internal Auditing Standards Board –Ethics Committee –Professional Issues Committee –Advance Technology Committee

13 The IIA’s Standard Setting Process Internal Auditing Standards Board –Standards reviewed every 3 years –Changes requires public exposure in English, French and Spanish 90 day exposure period Standard Oversight Committee –Majority stakeholders

14 The Institute of Internal Auditors Global Headquarters Urton Anderson Margie Poposky Bastolla