Over 100 take part in consultation on internal audit code aimed at reducing corporate collapse risks

22 November 2019

Over 100 stakeholders, including Chief Internal Auditors, Audit Committee Chairs and business groups, have taken part in a public consultation on a draft Internal Audit Code of Practice.

70 written responses were submitted during the consultation, which ran between 15 July and 11 October 2019. Senior internal audit professionals attended a ‘town hall’ consultation event in London on 3 October 2019 and hundreds more took part in discussions at events around the country. Meetings were held with senior stakeholders and Chief Internal Auditors from some of the UK’s biggest companies took part in online discussions about the draft Code.

The draft Internal Audit Code of Practice is aimed at boosting the status, standards, scope and skills of internal audit, strengthening corporate governance and risk management, to help reduce the risk of major corporate collapses. The final Internal Audit Code of Practice is set to be published in 2020 after the public consultation responses have been reviewed and the final Code agreed on.

Brendan Nelson the Audit Committee Chair of BP who chairs the Independent Steering Committee overseeing the development of the new Code said:

“We are delighted with the strong response we have had to our public consultation on the draft Internal Audit Code of Practice.  Over one hundred stakeholders including Chief Internal Auditors from some of Britain’s biggest firms, leading professional bodies and business groups have provided their views. Their contributions will help to strengthen internal audit and raise corporate governance standards which the Code is designed to achieve.”  

Notes for editors

1. The draft Internal Audit Code of Practice makes 30 recommendations including:

• Unrestricted access for internal audit so it is not stopped from looking at any part of the organisation it serves.
• Full access for internal audit to senior meetings, including the right to attend executive committee.

2. The draft Internal Audit Code of Practice builds on the Financial Services Code which was launched in 2013. Within two years, the Code had raised the scope and standing of internal audit in financial services:

• The number of Chief Audit Executives attending Executive Committees rose from 48% to 84%
• The number of Chief Audit Executives with an administrative reporting line to the CEO rose from 63% to 81%.
• The number of organisations carrying out audit work on risk culture rose from 54% to 93%.

3. The draft Internal Audit Code of Practice is being developed by an independent Steering Committee:

• Brendan Nelson, Audit Committee Chair, BP (Chair of the Internal Audit Code of Practice Steering Committee)
• Carolyn Clarke, Head of Audit, Risk and Control, Centrica
• Byron Grote, Audit Committee Chair, Tesco and Anglo American
• Angela O’Hara, Director Assurance & Risk, Johnson Matthey
• Colin Gray, Senior Vice President, Risk and Assurance, InterContinental Hotels Group
• David Lindsell, Audit Committee Chair, Drax Group
• Paul Kaczmar, Director of Internal Audit, Michael Page
• Paul Boyle, Chairman, Protect (Committee Adviser)
• Dr Ian Peters MBE, Chief Executive, Chartered IIA (Committee Observer)
• Paul George, Executive Director Corporate Governance & Reporting, FRC (Committee Observer)

The Chartered IIA is the only professional body dedicated exclusively to training, supporting and representing internal auditors in the UK and Ireland. We have over 10,000 members in all sectors of the economy. First established in 1948, we obtained our Royal Charter in 2010. About 1,000 of our members hold the position of Head of Internal Audit and the majority of FTSE 100 companies are represented among our membership. Members are part of a global network of 200,000 professionals in 170 countries.