1. The Professional Practices Framework: Ethics and Standards of Practice
Chapter 2
The Professional Practices Framework: Ethics and Standards of Practice

2. Chapter 2 Learning Objectives
Understand the structure of the Professional Practices Framework and type of guidance it provides.
Apply the professional guidance in the practice of internal auditing.
Use the Professional Practices Framework to address issues which arise in internal audit practice.
Understand the ethical principles and behavioral norms relevant to the profession and practice of internal auditing.
Identify the essential characteristics of functions, organizations, and individuals for the performance of effective internal audit activities.
Understand the nature of internal audit activities and the criteria against which performance of these activities can be measured.

3. The Professional Practices Framework
Components:
Code of ethics
Attribute standards
Performance standards
Implementation standards
Practice advisories (non mandatory guidance)
Other guidance (non mandatory guidance)
See Exhibit 2-1

4. Copyright: Internal Auditing: Assurance and Consulting Services, by The Institute of Internal Auditors Research Foundation, 247 Maitland Avenue, Altamonte Springs, Florida U.S.A.

5. Code of Ethics Components: Principles Rules of conduct
The rules describe 12 behavioral norms that the internal auditor should follow to put the Principles into practice.

6. Attribute Standards Definition:
Describe the defining characteristics of organizations, as well as the individuals performing internal audit services.

7. Performance Standards
Definition:
Describe the nature of internal audit services and provide quality criteria against which the performance of these services can be measured.

8. Implementation Standards
Definition:
Apply to specific types of internal audit services
The framework envisions potentially numerous sets of Implementation Standards, such as standards for specialized industries

10. Copyright: Internal Auditing: Assurance and Consulting Services, by The Institute of Internal Auditors Research Foundation, 247 Maitland Avenue, Altamonte Springs, Florida U.S.A.

11. Breaches of the Code of Ethics
Censure
Suspension of the membership and/or certification
Expulsion and/or revocation of certification
IIA’s Ethics Committee
Violation of any of the Code of Ethics will preclude the delivery of value addes and, thus, effective internal audit services.

12. The Attributes Standards
Purpose, authority, and responsibility - the function should have a charter that states the function’s purpose, authority, and responsibilities and specifies the types of assurance and consulting activities provided.
Independence and objectivity
Independence – the freedom of conditions that threaten objectivity or the appearance of objectivity
Objectivity – an unbiased mental attitude (not to subordinate their judgment)
Proficiency and due professional care
Proficiency – knowledge and skills for the function to fulfill its responsibilities
Due professional care – applying the care and skill expected of a reasonably prudent and competent internal auditor

13. Copyright: Internal Auditing: Assurance and Consulting Services, by The Institute of Internal Auditors Research Foundation, 247 Maitland Avenue, Altamonte Springs, Florida U.S.A.

14. The Performance Standards
Managing the internal audit function
Nature of work
Engagement planning
Performing the engagement
Communicating results
Monitoring progress
Management’s acceptance of risks

15. Copyright: Internal Auditing: Assurance and Consulting Services, by The Institute of Internal Auditors Research Foundation, 247 Maitland Avenue, Altamonte Springs, Florida U.S.A.

16. The Practice Advisories
Non mandatory
Provide more specific guidance

17. Copyright: Internal Auditing: Assurance and Consulting Services, by The Institute of Internal Auditors Research Foundation, 247 Maitland Avenue, Altamonte Springs, Florida U.S.A.