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proposed changes and implications - international standards for internal audit

Proposed Changes and Implications – International Standards For Internal Audit

The International Professional Practices Framework (IPPF) is a set of professional standards and guidelines that provide a framework for internal auditors to follow in carrying out their work. The IPPF is published by the Institute of Internal Auditors (IIA), and it has been widely adopted by internal auditors around the world.

The IIA plays a crucial role in standard setting and providing other guidance for the internal audit profession. The IIA continuously evaluates and updates its standards to ensure their relevance and effectiveness and have recently released a draft for public comment on proposed changes to the IPPF.

What changes are proposed to the IPPF?

The IPPF consultation, which was released in March 2023, proposed a number of changes to the existing IPPF including:

  • Simplify the structure of the standards.
  • Consolidate the six existing elements in the new standards, including Mission, Definition, Code of Ethics, Core Principles, Standards, and Implementation Guides.
  • Create a new section on the “Purpose of Internal Auditing.”
  • Enrich the Ethics and Professionalism sections by adding “due professional care.”
  • Add nuances for public sector, small internal audit functions, and advisory services.
  • Clarify the board’s role in governing the internal audit function.
  • Clarify the role of the Chief Audit Executive (CAE) and internal audit functions.
  • Redefine the quality = conformance + performance

Feedback from the public consultation period will inform the continued development of the new Standards. The final Standards will be issued in late 2023 and take effect 12 months after release.

What are the proposed Global Internal Audit Standards?

Beyond the extensive changes to the Standards themselves, the public comment draft articulates the keys to effective internal auditing by grouping the Standards into five (5) domains under the newly named Global Internal Audit Standards:

Domain I: Purpose of Internal Auditing articulates how internal auditing helps organisations achieve success, and the conditions that make internal auditing most effective.

Domain II: Ethics and Professionalism incorporates the Code of Ethics and the current Standards relating to practitioner conduct and is enriched by addressing due professional care.

Domain III: Governing the Internal Audit Function clarifies the board’s role. This change outlines important board responsibilities in support of an effective internal audit function and addresses how the Chief Audit Executive (CAE) can support the board in carrying out its responsibilities.

Domain IV: Managing the Internal Audit Function clarifies the CAE’s role and the responsibilities for effectively managing an internal audit function.

Domain V: Performing Internal Audit Services includes additional requirements and practices to ensure internal auditors provide high-quality services.

The proposed Global Internal Audit Standards (Standards) represent the culmination of two years of effort, including input from some 90 different IIA affiliates.

Anthony Pugliese, IIA President and CEO, indicated, “The standard-setting follows a rigorous due process and aims to meet the fundamental needs of the profession and serves the public interest. I am confident the draft will be well received and look forward to feedback during the public comment period.”

What do these changes mean for internal auditors?

The proposed changes to the standards aim to address the evolving needs of the internal audit profession in a dynamic business environment and seek to empower internal auditors to deliver greater value to their organisations.

As the IIA finalises these changes, internal auditors must prepare themselves to adapt and embrace the new standards and the evolving landscape of internal audit to remain effective and relevant in their roles.

How can we assist your internal audit function?

Contact us today to learn more about how National Audits Group can help your organisation navigate these changes and ensure your internal audit function is prepared to align with and benefit from the proposed new standards.


Stephen Prowse

Director National Audits Group | www.audits.com.au

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