The Institute of Internal Auditors has enhanced its International Professional Practices Framework, which has provided internal auditors worldwide professional guidance in various forms since 1947, in response to more recent risks, while also releasing a report on the current pulse of the internal audit profession.

The updated framework now includes a Mission of Internal Audit and articulation of 10 Core Principles for the Professional Practice of Internal Auditing. The changes do not affect the content of other key elements of the framework, including the definition of internal auditing, the Code of Ethics or International Standards for the Professional Practice of Internal Auditing, the IIA pointed out Monday.

The new mission statement articulates what internal audit aspires to accomplish: “To enhance and protect organizational value by providing risk-based and objective assurance, advice and insight.”

The new Core Principles highlight what effective internal auditing looks like in practice as it relates to the individual auditor, the internal audit function, and internal audit outcomes. These include, among other things, demonstrating integrity, objectivity, competence, and due professional care. In addition, the principles highlight the need for internal audit to be proactive, insightful and future-focused.

Other enhancements to the framework include transitioning “Practice Advisories” to a more comprehensive suite of “Implementation Guidance”; and grouping Practice Guides and Global Technology Audit Guides, as “Supplemental Guidance.”

The IIA said the new structure does not eliminate the content of existing Practice Advisories, but recognizes that these will be revised and re-issued as Implementation Guides over the next 18 months. Starting this month, the Practice Guides automatically will become part of the IIA’s recommended Supplemental Guidance and will be updated as needed.

“The enhancements we unveil today are designed to strengthen internal audit’s position as an invaluable partner in business success,” said Larry Harrington, senior vice chairman of the IIA’s Global Board and chairman of the IPPF Re-look Task Force Steering Committee, in a statement Monday. “As we traverse an increasingly complex business environment, we must be clear what internal audit’s mission is and underscore the basic tenants and principles that will continue to propel our profession forward.”

Global Pulse Report
Separately, the IIA also released on Monday a new report at its annual international conference, the 2015 Global Pulse of Internal Audit: Embracing Opportunities in a Dynamic Environment. The report cites data from a recent global survey of internal audit practitioners that finds most audit departments are far from flexible in adapting their audit plans to better handle unexpected and fast-paced changes in risks.

The free report urges chief audit executives to take a broad view of risks and flexible audit planning and to have the boldness to expand internal audit’s domain and the courage to handle political pressures.

“Internal audit is in an unprecedented position to show our stakeholders we are capable of operating and thriving in an emerging-risk landscape,” said IIA president and CEO Richard F. Chambers in a statement. “This new Global Pulse report, however, suggests that many of our internal audit colleagues must change their approach audit planning to meet today’s fast-moving business challenges.”

The report examines how enterprise risk management, integrated and sustainability reporting, and political pressure will affect the internal auditing profession’s future.

In each area, the report’s analysis and recommendations are based on results from the 2015 Global Internal Audit Common Book of Knowledge survey, which tapped the views of more than 14,500 internal audit practitioners from 166 countries, including the United States and Canada.

For example, in audit planning, the report recommends making the traditional audit plan more flexible in order to respond to emerging risks. The report concludes that the current business dynamic demands nearly continuous risk assessment to provide true assurance.

Only 23 percent of respondents to the survey reported they practice continuous risk assessment. In addition, only 16 percent indicated their audit plan process is flexible enough to respond to emerging risks immediately.

The report, produced by the IIA’s Audit Executive Center, acknowledges the political pressures that chief audit executives, or CAEs, currently face, but points out that independence, board support, and a high-quality internal audit function are crucial to combating such pressure.  CAEs, according to the report, “should be free from the control of those they need to audit.” However, nearly one out of three survey respondents said they report both functionally and administratively to management, making it more difficult for audit executives to avoid political pressures at their companies.

Awards Presented
At its conference in Vancouver, B.C. on Monday, the IIA gave author Manny Rosenfeld the John B. Thurston Award for his article on performing operational audits of repair and maintenance functions titled “No Crash Landings,” which appeared in the February 2014 issue of Internal Auditor.

Also on Monday, the Esther R. Sawyer Research Award was presented to Amanda Gates Carlson, a student at Bentley University in Waltham, Mass. Gates Carlson earned the award for her manuscript, “Internal Auditor, Advocate for Thyself: Professional Advocacy Recommendations for Internal Auditing.”

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