1. CIPFA/IMFO Development Programme for Internal Auditors
IMFO Indaba
April 2015 Durban
Dr Adrian Pulham
Executive Director
CIPFA

2. CIPFA, an introduction
Professional body for public sector accountants and auditors
PSIA standard setter in the UK
Provides certification for members in public audit bodies around the world
Founder member of IFAC
Working closely with IIA
Working closely with INTOSAI
The Chartered Institute of Public Finance and Accountancy (CIPFA) is the professional body for people (including, but by no means exclusively, internal auditors) in the public sector. CIPFA members work in a range of public audit entities (internal and external) both in major accountancy firms and across the public sector. CIPFA is a founder member of the International Federation of Accountants (IFAC) and is well represented by members and officers on several boards and committees there. It has good relations with the Institute of Internal Auditors (IIA) and the International Organisation for Supreme Audit Institutions (INTOSAI).
CIPFA is the world’s only professional accountancy body to specialise in the public services. At the core of our portfolio are professional qualifications specially designed to cover coherently the full requirements of public audit and accountancy. We offer a broad range of qualifications from entry level (Certificate) through intermediate level (Diploma) and ultimately leading toward full professional qualification. We have current relevant experience of the certification of internal auditors and accountants in several eastern European and African countries.
In the UK the government has entrusted CIPFA with the responsibility for internal audit and accounting standards for local government (represented by the Code of Practice for Internal Audit – 2006 latest version). CIPFA’s Audit Panel (a panel of CIPFA expert members that supports the Institute’s governance) comprises senior members of the profession who oversee these responsibilities, as well as issuing other guidance, publications and training for public sector internal auditors on its own and through CIPFA’s Better Governance Forum. We also work closely with Her Majesty’s Treasury to harmonise standards with those of central government and other key sectors (e.g. health). We respond to invitation-only as well as public consultations on internal audit, governance and risk management across the UK.

3. Effective PSIA – key components
aim of this guide is to provide practical support, examples and resources to help make internal audit more effective across the public services.
It is aimed at internal audit practitioners, heads of audit and team leaders. Those responsible for managing internal audit, such as directors of resources and chief executives, would also find it useful since it covers the effectiveness of the internal audit service. It would also be of interest to audit committee members who review the work and assurances of internal audit, and rely on their effectiveness.
The guide is generic and applies to internal audit across all parts of the public services. The project team included representatives from internal audit in local government, health and central government (HM Treasury).
The guide:
provides practical support, examples and resources
helps make internal audit more effective in public service organisations
identifies the essential components for effective internal audit, and
helps internal auditors to demonstrate their effectiveness.
The guide contains:
guidance and good practice in building an effective internal audit service
self assessment improvement tools on leadership and demonstrating effectiveness
17 case studies of improvements made by public service organisations
6 additional case studies and guidance on how internal audit works within the organisation’s assurance framework, and
internet links to useful resources to support audit teams.

4. CIPFA’s Advocacy Strategy
Strategic Theme 4
Development partners include PSIA in PFM capacity building projects
Strategic Theme 1
Appropriate PSIA standards
Strategic Theme 2
The value of PSIA recognised, respected and required
Strategic Theme 3
PSIA essential to PFM reform
The overarching goal of the strategy is to help partner countries transform the capability and capacity of their IA function so that IA can meet its professional duty to provide management with competent and timely assurance and advice on the effectiveness of the PFM system.
The strategy outlines four objectives:
A: Appropriate public sector IA standards, professional guidance and practitioner capacity are developed for use in partner countries.
B: the value of competent public sector IA is recognised, respected and demanded for effective PFM.
C: PFM reform acknowledges the value IA can offer and incorporate a capacity development component within the overall context of the country’s PFM development strategy.
D: development partners harmonise efforts to develop partner country public sector IA.
We see value in each of these objectives (whilst recognising that they will be demanding to achieve) but can offer experience supported by existing guidance and publications with reference to each of them. The prime area of interest for CIPFA is objective A: in relation to the development of standards and professionalisation where we feel we can make a substantial contribution.
How we do it 44 publications, practice guides etc

5. Code of Practice for PSIA
Scope of PSIA
Independence
Ethics
Audit planning
Performance
The Code’s requirements are mandatory for all principal local authorities and other relevant bodies subject to the Accounts and Audit Regulations 2003 in England (as amended 2006), the Accounts and Audit Regulations 2005 (Wales), Section 95 of the Local Government (Scotland) Act 1973, and Section 54 of the Local Government Act (Northern Ireland) Its themes are also relevant to a wider audience, such as police and fire authorities.
The Code is aimed at those who play a part in shaping or managing the internal audit function within their organisations, including:
Chief Executives
Responsible Financial Officers and other senior management
The Audit Committee
Elected members within local government in the UK, and
Heads of Internal Audit
For the first time, the Code includes a powerful checklist to allow the performance of internal audit to be measured against the standards contained within the Code. The checklist can be used by Heads of Internal Audit or by those carrying out a review of internal audit.
The revised Code of Practice covers the following areas:
Scope of Internal Audit
Independence
Ethics for Internal Auditors
Audit Committees
Relationships
Staffing, Training and Continuing Professional Development
Audit Strategy and Planning
Undertaking Audit Work
Due Professional Care
Reporting
Performance, Quality and Effectiveness

6. Enhanced Systems Based PSIA
Internal control
COSO based
Systems testing
To combat fraud and loss, it is essential that organisations (whether they are in the public, private or not-for-profit sector) have effective systems of internal control in place. But it is not just financial risks that organisations may be exposed to. Events such as the summer floods in 2007 show the need for robust and effective risk and business continuity management systems to be established, tested and maintained.
To assess the effectiveness of systems of internal controls and risk and business continuity management and whether they are embedded, an Enhanced Systems Based Auditing (ESBA) approach has been devised. ESBA is ‘risk-based’ SBA that uses the internationally recognised COSO Enterprise Risk Management - Integrated Framework (2004) approach.
In accordance with the COSO ERM approach, ESBA tests whether the organisation’s objectives, policies and procedures have been embedded by assessing the extent that they are in operation throughout the organisation from the corporate level right down to individual. The incorporation of such testing into systems work may identify individual cases or indeed general lack of awareness of policies and procedures thus highlighting possible communication problems, for example.
A Guide to Enhanced Systems Based Auditing explains this new approach, which was used as the basis for CIPFA’s Systems Based Auditing Control Matrices Series 7. The guide also gives an example of a risk-based audit planning process and shows how audit findings can be recorded and reported to achieve maximum impact.
The guide is therefore essential reading for audit managers and staff and will also be of interest to members of the senior/strategic management team, and scrutiny and audit committees who wish to ensure that the organisation and its audit service are effective and achieving their goals and objectives.

7. Procurement Audit Holistic approach Risk based Contract audit
Fraud audit
VFM audit
Best practice
Public sector organisations each spend tens, if not hundreds of millions of pounds each year buying in goods, works and services. This expenditure ranges from relatively small valued purchases of commodity items to formal contracts for the delivery of major services and capital construction works.
In the past, CIPFA has advocated a systems-based approach to the review of this type of expenditure, which involved focusing on the key controls governing contracting processes during the pre-, current and post-contract stages. However, the modern audit approach to procurement requires a holistic view that concentrates on the issues associated with the key strategic risks faced by the organisation.
A Risk-based Approach to the Audit of Procurement will assist those who wish to adopt this system of analysis with regards to procurement. It is designed to facilitate a top-down approach and will aid auditors as they come across procurement related issues when carrying out the reviews that are necessary to provide assurance on an annual basis.
It will help auditors, risk managers and procurement professionals address the subject of contracts during their review of an organisation’s risk management structures and procurement policies by centring on the following top-level risks:
contracts not delivered on time, within budget or of acceptable quality
procurement expenditure failing to fulfil the need
fraud
failure to secure value for money
failure to reflect best practice, adhere to legislation or adequately accommodate equality and diversity
organisation fails to improve.
This publication will help steer reviews towards examining how risk management structures and systems of internal control ensure that the procurement framework adequately addresses each of the risks involved.

8. Auditing Standards Based on the International Auditing and Assurance
Standards Board
guidance and standards
This revised edition provides an overview of standard setting as it affects public services in the UK, explaining the process by which standards are interpreted or adapted for the different public service sectors, and the key differences from private sector practice. Since publication of the third edition, international standard setters have further refined their standards:
the International Public Sector Accounting Standards Board has produced a more comprehensive set of standards, and begun development of a public sector conceptual framework
the International Accounting Standards Board has continued to develop its framework, while also attending to demands arising from the economic crisis, and
the International Auditing and Assurance Standards Board has completed its ‘Clarity’ project to produce more clearly drafted standards on auditing.
Financial statements based on EU adopted IFRS were published by the UK central government sector for , and an IFRS-based Code for local authority reporting is now subject to review by the Financial Reporting Advisory Board rather than the Accounting Standards Board.
Meanwhile the Accounting Standards Board has continued to consult on the future of UK GAAP for small- and medium-sized companies and other bodies outside government. It has developed proposals based on the simpler IFRS for SME standard, to be supplemented by a Public Benefit Standard for non-governmental entities such as charities, social housing and education institutions. The guide also reflects changes in the structure and regulation of government and wider public services since 2007.
This guide will be a useful overview for practitioners, accountancy students and all those interested in financial reporting and audit in the public services.

9. Audit Committees Often required by law Enhance public trust
Independent
Central part of good
governance
This guidance from CIPFA encourages local authorities to put in place an audit committee where they do not have one, and helps those with established committees to make them more effective.
Audit committees have been required in many organisations in both the private and public sectors for some time now, but local government has some ground to make up. Fewer then half the local authorities in England and Wales have an audit committee. Yet audit committees are a key aspect of good corporate governance; they help raise the profile of internal control, risk management and financial reporting issues within an organisation, as well as providing a forum for the discussion of issues raised by internal and external auditors. And they enhance public trust and confidence in the financial governance of an organisation.
Ideally, audit committees should be separate from executive and scrutiny arrangements, and chaired independently from both these functions. Local authorities may organise their committee functions differently, but what is important is that the functions of an audit committee are delivered efficiently and effectively.
Status and independence are important, but being effective also means having well informed people able to confirm to the council that the right processes are in place to give confidence that the local authority’s financial stewardship and overall governance arrangements can be relied upon. CIPFA’s guidance, therefore, provides valuable advice on the skills required by members, their selection and training, and how committees should be supported.
Audit committees are not just the concern of auditors; they are about the governance, financial reporting and performance of the whole organisation. Everyone charged with the responsibility for governance in their local authority will want to familiarise themselves with the issues covered by this new practical guide, and will doubtless wish to share it widely as a driver to enable their audit committee to work effectively.

10. Internal Audit manual Framework for the HIA Revised standards
Written by practitioners
Students and new staff
This manual is a revised and updated version of the original produced in Each chapter is cross referenced to the Code of Practice for Internal Audit in Local Government in the United Kingdom 2003, to assist auditors to deliver the standards in the Code. It also reflects the latest thinking in governance, risk management and internal audit. The objectives of the manual are to:
facilitate delivery of continuous improvement
provide a framework for the head of internal audit whilst signposting to detailed guidance/best practice for new starters and less experienced internal auditors
be capable of being adapted for use as an off the shelf manual for those authorities without a local document in place, and also of being adapted to include local procedures and documentation
make the transition to the new Code, building on the revised standards and definition of internal audit.
As with the previous version, the manual has been designed and built by internal audit practitioners. It presents an overview of the work of the internal audit section and how its work should be carried out. It offers practical, easy to use documentation based on actual examples from a wide range of leading internal audit sections. It also signposts the reader to more detailed, technical guidance where required. The manual’s contents are stored on CD-ROM, allowing you to tailor the manual to your authority’s needs. Also included on the disc is a powerful search facility allowing the user to quickly find their requested material.
Particularly helpful for students and new staff, this manual is also an essential source for the seasoned auditor looking for information about new topics or techniques, or about how to approach a particular task.
How it will assist you in your day-to-day role
The work of local government internal auditors is governed and guided by:
legislation
standards laid down by professional bodies
the authority’s own policies, procedures, rules and regulations.
The CIPFA Local Government Internal Audit Manual covers all of this and more. Simply install the CD-ROM on your system and your whole organisation has instant access to information and easily adaptable work tools at the click of a mouse. For example:
The Statement on Internal Control in Local Government: Meeting the Requirements of the Accounts and Audit Regulations 2003 and a range of other relevant CIPFA publications
external hyperlinks to other publications and organisations
example practice forms, letters, plans and a range of other audit documents reproduced or adapted from those in use with leading internal audit sections nationwide – from a model charter to audit training matrices. Use them as they are or adapt them to suit your needs.
The manual also includes some valuable supporting content from the CIPFA’s TISonline service and links to follow up for further information from this service.
All in all, the CIPFA Local Government Internal Audit Manual:
continues to fill the gap between the Code of Practice for Internal Audit in Local Government in the United Kingdom 2003 and CIPFA’s detailed Systems Based Auditing Control Matrices
recognises that internal audit functions vary and that one size does not fit all. We therefore encourage you to tailor it to your own needs – adding or linking it to your own policies, procedures and working paper layouts
enhances audit practices throughout local government, by sharing good practice and facilitating comparison. This in turn will assist you to improve the quality and profile of your service and help to demonstrate continuous improvement.

11. Member Support CIPFA Audit Panel Role of the Chief Internal Auditor
Consulting the profession
Statement on the role of the chief internal auditor in public services organisations
The chief internal auditor (CIA) occupies an important position in any organisation, reviewing financial and other controls and providing assurance to management and others. In the public services these responsibilities have an extra edge because public money is at stake.
The CIA role has changed over recent years. As well as providing assurance on key financial and other systems there is an increasing focus on internal audit’s role in risk, corporate governance and adding value. CIAs now give annual assurances from their work. With a difficult financial climate and demands for ‘more for less’ risks are becoming greater and giving this assurance will be increasingly challenging.
Earlier this year CIPFA issued its ‘Perceptions of Audit Quality’ publication. This showed that there was still some confusion about the role of internal audit and that internal auditors were not always held in high esteem. The survey showed that there was a role for internal audit to help support top management and to review high level corporate issues. But it was not clear whether they had the skills. This resonates with some of the messages emerging from CIPFA’s review of its role in internal audit (the results of this review were taken to and endorsed by CIPFA’s Public Finance Management Board in October).
HM Treasury is currently carrying out a transformation project that is looking at how internal audit is provided in government departments, agencies and non-departmental public bodies and what changes are needed.
Earlier this year CIPFA issued a Statement on the role of the Chief Financial Officer in public service organisations. This attracted wide interest and debate and was well received.
Against this background CIPFA has decided that it would be timely to issue a Statement on the role of the CIA. This will be principles based and be relevant to all parts of the public services. The aim will be to clarify the role of the CIA and in doing so raise the profile of internal audit. We plan to use the role of the Chief Financial Officer Statement as a model:
The work will be carried out through a panel. This will comprise Audit Panel members, senior managers from the public services and other stakeholders.
We aim to draft a Statement for consultation in the New Year and to issue the final Statement at CIPFA’s Audit Conference in May 2010.
As a first step we welcome views on the key principles that we should set and the issues that we should cover (e.g. reporting lines and internal audit’s role in corporate governance and risk management) and for your views on what the role of the CIA is (and is not).

12. Conclusion Effective PSIA requires Standards
Professional internal auditors
Greater capacity
Professional support and development

13. Level 1, the Certificate Internal Audit Fundamentals
Public Sector Accounting and Financial Reporting
Governance and Control
The Training of Internal Auditors in the Public Sector (TIAPS) is a two-level professional qualification training programme for public sector internal auditors.
Government reforms place new demands on the staff responsible for public financial management, often testing their level of professionalism and competence. Internal auditors play a crucial role and thus need advanced training and career development to upgrade their existing skills and adopt a fresh mindset in their profession.
To address this need, we have established a programme that strengthens professional qualifications in internal audit processes. It helps individuals apply international standards and improve accountability within reformed public finance systems. The curriculum devotes special attention to requirements introduced by the accession processes of the European Union.
TIAPS offers:
• internationally recognized, professional qualification provided jointly by IMFO and CIPFA
• high-quality training materials designed for public sector internal auditors
• coverage of national public finance, internal auditing, and accountancy legislation and taxation
• flexible training methods: classroom training, tutorials, and a blend of theoretical and hands-on courses by expert tutors
• fresh mindset towards a more transparent public sector and cost-effective use of funds in line with international standards and best practices
The TIAPS training curriculum consists of three integrated modules at the certificate level and three integrated modules at the diploma level. Completion of each level normally takes one year. The duration of each module is about two months.
Certificate and diploma holders will be able to:
• lead and manage teams of internal auditors
• plan internal audit assignments
• review and control the work of the internal audit team
• establish and maintain effective working relationships with the external audit function
• give assurance to management and donors relating to the proper use of funds that they provide
• manage, maintain and develop effective working relationships with client departments
• contribute to the operation, management and development of the internal audit function within the wider corporate governance context
• undertake audits of performance
• better comply with efficient international auditing standards and techniques

14. Level 2, the Diploma Advanced Internal Auditing
Auditing Management Performance
Managing the Internal Audit Function

15. Benefits to you Professional recognition CIPFA Affiliate Membership
Publications
Audit panel involvement
CPD
Branch Activities
Management Direct
Further partnership working with IMFO