International Standards from Janurary 2011 - Introduction
Internal auditing is conducted in diverse legal and cultural environments; within organisations that vary in purpose, size, complexity and structure; and by persons within or outside the organisation. While differences may affect the practice of internal auditing in each environment, conformance with The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards) is essential in meeting the responsibilities of internal auditors and the internal audit activity.
If internal auditors or the internal audit activity is prohibited by law or regulation from conformance with certain parts of the Standards, conformance with all other parts of the Standards and appropriate disclosures are needed.
If the Standards are used in conjunction with standards issued by other authoritative bodies, audit communications may also cite the use of other standards, as appropriate. In such a case, if inconsistencies exist between the Standards and other standards, internal auditors and the internal audit activity must conform with the Standards and may conform with the other standards if they are more restrictive.
The purpose of the Standards is to:
1. Delineate basic principles that represent the practice of internal auditing.
2. Provide a framework for performing and promoting a broad range of value-added internal auditing.
3. Establish the basis for the evaluation of internal audit performance.
4. Foster improved organisational processes and operations.
The Standards are principles-focused, mandatory requirements consisting of:
Statements of basic requirements for the professional practice of internal auditing and for evaluating the effectiveness of performance, which are internationally applicable at organisational and individual levels.
Interpretations, which clarify terms or concepts within the Statements.
The Standards employ terms that have been given specific meanings that are included in the Glossary. Specifically, the Standards use the word must to specify an unconditional requirement and the word should where conformance is expected unless, when applying professional judgment, circumstances justify deviation.
It is necessary to consider the Statements and their Interpretations as well as the specific meanings from the Glossary to understand and apply the Standards correctly.
The structure of the Standards includes Attribute, Performance and Implementation Standards.
Attribute Standards address the attributes of organisations and individuals performing internal audit services. The Performance Standards describe the nature of internal audit services and provide quality criteria against which the performance of these services can be measured. The Attribute and Performance Standards apply to all internal audit services. The Implementation Standards expand upon the Attribute and Performance Standards, providing the requirements applicable to assurance (A) or consulting (C) activities.
Assurance services involve the internal auditor’s objective assessment of evidence to provide an independent opinion or conclusions regarding an entity, an operation, a function, a process, system, or other subject matter. The nature and scope of the assurance engagement are determined by the internal auditor. There are generally three parties involved in assurance services: (1) the person or group directly involved with the entity, operation, function, process, system, or other subject matter the process owner, (2) the person or group making the assessment the internal auditor and (3) the person or group using the assessment the user.
Consulting services are advisory in nature and are generally performed at the specific request of an engagement client. The nature and scope of the consulting engagement are subject to agreement with the engagement client. Consulting services generally involve two parties: (1) the person or group offering the advice the internal auditor and (2) the person or group seeking and receiving the advice the engagement client. When performing consulting services the internal auditor should maintain objectivity and not assume management responsibility.
The review and development of the Standards is an ongoing process. The Internal Audit Standards Board engages in extensive consultation and discussion prior to issuing the Standards. This includes worldwide solicitation for public comment through the exposure draft process. All exposure drafts are posted on The IIA’s Web site as well as being distributed to all IIA institutes.
Suggestions and comments regarding the Standards can be sent to:
The Institute of Internal Auditors
Standards and Guidance
247 Maitland Avenue
Altamonte Springs, FL 32701-4201, USA
E-mail: guidance@theiia.org