The Schinlever Group operates within the International Standards for the Professional Practice of Internal Auditing (Standards) as promulgated by The Institute of Internal Auditors. The Standards that apply to internal audit services in general consist of Attribute Standards (the 1000 Series) and Performance Standards (the 2000 Series). “The Attribute Standards address the characteristics of organizations and parties performing internal audit activities. The Performance Standards describe the nature of internal audit activities and provide quality criteria against which the performance of these services can be evaluated.” The general Attribute and Performance Standards are presented below to provide the Audit Committee and the Board of Directors an understanding of the role and responsibilities of internal audit.
The purpose, authority, and responsibility of the internal audit activity should be formally defined in a charter, consistent with the Standards, and approved by the Board.
The internal audit activity should be independent, and internal auditors should be objective in performing their work.
Engagements should be performed with proficiency and due professional care.
The chief audit executive should develop and maintain a quality assurance and improvement program that covers all aspects of the internal audit activity and continuously monitors its effectiveness. The program should be designed to help the internal auditing activity add value and improve the organization’s operations and to provide assurance that the internal audit activity is in conformity with the Standards and the Code of Ethics.
The chief audit executive should effectively manage the internal audit activity to ensure it adds value to the organization.
The internal audit activity should evaluate and contribute to the improvement of risk management, control and governance processes using a systematic and disciplined approach.
Internal auditors should develop and record a plan for each engagement, including the scope, objectives, timing and resource allocation.
Internal auditors should identify, analyze, evaluate, and record sufficient information to achieve the engagement's objectives.
Internal auditors should communicate the engagement results to Management and the Audit Committee of the Board of Directors.
The chief audit executive should establish and maintain a system to monitor the disposition of results communicated to management.
When the chief audit executive believes that senior management has accepted a level of residual risk that is unacceptable to the organization, the chief audit executive should discuss the matter with senior management. If the decision regarding residual risk is not resolved, the chief audit executive and senior management should report the matter to the board for resolution.”
From the International Standards for the Professional Practice of Internal Auditing.
Copyright 2006 by The Institute of Internal Auditors, Inc., 247 Maitland Ave, Altamonte Springs, FL 32710-4201 U.S.A.
Reprinted with Permission.
