1. Taking the STANDARDS Seriously
. . . what they are and why they are so critically important to internal audit professionalism.

2. Professionalism Means:
Adherence to the Standards.
Compliance with the Code of Ethics.
Competency, evidenced by certification (CIA).
Maintaining a “Quality Assurance & Improvement Program.”
Ongoing professional development.
Internal auditing is a true profession, guided by Standards and a Code of Ethics, and clearly defined.

3. Internal Auditing Independent Objective
Assurance & consulting activity
Adds value
Improves operations
Helps accomplish objectives
For us to understand the role the Standards play we must first read and understand the definition of Internal Auditing. The Standards support this definition.

4. and disciplined approach to evaluate and improve the effectiveness
Internal Auditing
Brings a systematic
and disciplined approach to evaluate and improve the effectiveness
of the
risk management,
control,
and
governance processes.
This definition of internal auditing was approved by The IIA Board of Directors 6/26/99.

5. International Professional Practices
Framework (IPPF)
The IPPF is a framework for the internal audit profession’s body of knowledge and guidance. It comprises the
Definition,
International Standards, Code of Ethics, and other guidance.

6. International Professional Practices
Framework (IPPF)
The Definition provides a
Statement of internal auditing’s
fundamental purpose, nature,
and scope.

7. International Professional Practices
Framework (IPPF)
The International Standards for the Professional Practice of Internal Auditing (Standards) serve as mandatory guidance
for professionals who practice internal auditing.

8. What are the Standards?
Essential and mandatory guidance for meeting internal audit responsibilities.
A blueprint for professional internal auditing.
Criteria used to evaluate and measure the operations of an internal audit activity.
Standards, as described within the Professional Practices Framework (PPF), are the criteria by which the operations of an internal audit department are evaluated and measured. They consist of three parts:
Attribute – attributes of organizations & individuals
Performance – nature & quality of IA services
Implementation – specific guidance.
The Standards are meant to serve the entire profession of internal auditing, in all types of organizations where internal auditors are found.

9. Why adhere to the Standards?
Internal auditing is a cornerstone of effective governance.
Practice of the Standards improves governance.
Improved governance positively impacts stakeholders and supports the audit committee and executive management.
Compliance with the concepts spelled out in the mandatory guidance (Standards) is essential to professional internal audit practice.
The Standards also provide consistency within an enterprise and among enterprises.
They are a roadmap for the professional practice of internal auditing.
They provide an easily understood common framework of understanding

10. The Standards Prescribe
Necessity for an internal audit charter.
Requirements of an internal audit activity.
Responsibilities of a chief audit executive (CAE).
Overview of the internal audit process.
Necessity for a “Quality Assurance and Improvement Program.”
The purpose, authority, and responsibility of the internal audit activity should be defined formally in a charter, consistent with the Standards and approved by the audit committee.
The internal auditors should be independent and objective in performing their work.
Independent
Objective
Proficient
Due professional care
The CAE has responsibility to ensure the audit work is performed in accordance with the Standards to ensure a high level of quality while continually raising the level of expectation in the eyes of the stakeholders and maintaining a Quality Assurance and Improvement Program (w/internal & external quality assessments).
These efforts are viewed as value-added by all parties. Additionally, the CAE responsibilities include ensuring application of a risk-based audit approach during each audit planning phase.
Before each audit, internal auditors should develop a plan that includes scope, objectives, timing, and resources. During the engagement, internal auditors should identify, analyze, evaluate, and record sufficient information to achieve the internal audit project’s objectives. Once the audit is complete, the results should be communicated in an accurate, objective, clear, concise, constructive, complete, and timely manner. The internal auditors should evaluate and contribute to the improvement of risk management, control, and governance processes using a systematic approach. As a result, management should agree to take actions to improve their controls, and the CAE should establish a follow-up process to monitor and ensure that these management actions have been implemented effectively.

11. International Professional Practices
Framework (IPPF)
The Code of Ethics also is
mandatory
guidance for professionals who practice internal auditing.

12. Code of Ethics Relevant principles Rules of conduct
Adherence to the Standards.

13. Code of Ethics Integrity Objectivity Confidentiality Competence
By acting with integrity internal auditors establish trust and provide the basis for reliance on their judgment. Internal auditors perform their work honestly, observing the law, while contributing to the legitimate and ethical objectives of the organization. (establishes trust and reliance on judgment).
Internal auditors exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information. Internal auditors make a balanced assessment of all relevant circumstances and are not unduly influenced by their own interests or by others. Internal auditors avoid activities and relationships that might be seen to undermine their objectivity. (balances assessment)
Internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority, unless there is a legal or professional obligation to do so. Internal auditors should use information prudently and not for their personal benefit. (respects the value and ownership of information)
Internal auditors apply the knowledge, skills, and experience needed for their role. They perform their work in accordance with the Standards and engage in continuing professional development. (applies knowledge, skills and experience)

14. International Professional Practices
Framework (IPPF)
Beyond the Definition, Standards and the Code of Ethics, the
Position Papers, Practice Advisories, and
Practice Guides
serve as strongly recommended guidance for professionals who practice internal auditing.

15. Position Papers
Help a wide range of interested parties — including those not in the internal audit profession — to:
Understand significant governance, risk, and control issues.
Delineate internal audit-related roles and responsibilities

16. Practice Advisories
Address approach methodology and considerations but not detail processes & procedures.
Provide timely guidance to assist in applying Code of Ethics, Standards, and promoting good practices.
Relate to international-, country-,or industry-specific issues; specific types of engagements; and legal or regulatory issues.

17. Practice Guides
Provide information on how to conduct internal audit activities, including detailed:
Processes and procedures.
Tools and techniques.
Programs.
Step-by-step approaches.
Examples of deliverables.

18. Other Guidance Responses to exposure drafts and regulatory bodies
Global Technology Audit Guides (GTAG)
Topical materials and tools

19. Take the Standards seriously!
Obtain your personal copy of the IPPF.
Study the Standards.
Refer to the strongly recommended guidance often.
Comply with the Standards.
Keep up with the most current guidance, via
Promote the importance of the Standards to professionalism.
Some refer to the PPF as the “Red Book.”

20. This presentation is from The Institute of Internal Auditors Global Headquarters Questions? Contact