Internal Audit Code of Practice Consultation Document
The IIA has recently published a consultation document that ever internal auditor should be reviewing. Here is a quick summary of the key points.
3/11/20241 min read
Summary of the Revised Internal Audit Code of Practice Consultation Document
The Institute of Internal Auditors (IIA) is consulting on a revised Internal Audit Code of Practice. The revision process aims to align the Code with the new Global Internal Audit Standards and reflect changes including the revised UK Corporate Governance Code, along with evolving industry practices.
Key Proposed Changes
Unified Code: The proposal suggests combining the two existing Codes of Practice – one for financial services and the other for the private sector (non-financial services) and the third sector. The new Code will put all internal audit functions on an equal footing, aiming to raise the bar across the profession.
Flexibility: While preserving the specific requirements that apply to internal audit operating in financial services, the new Code allows flexibility for those operating in non-financial services.
Principles-Based Guidance: The Code will remain principles-based guidance that should be applied proportionately. The aim is to encourage internal audit functions to champion good corporate governance, strong risk management, and a rigorous control environment.
New Industry Benchmark: The revised Code will serve as a new industry benchmark for best practice internal audit. It will provide a gauge for boards, audit committees, and regulators to assess the role, function, and effectiveness of internal audit functions.
Inclusion of Risks: All internal audit functions are recommended to include within the scope of their work the capital and liquidity risks and the reputational risks arising from poor customer treatment.
Harmonisation of Practices: The new Code seeks to harmonise practices across the profession, recognising that differences may exist depending on the nature, size, and scale of an organisation, as well as the industry and environment they operate within.
The consultation period ends on Wednesday 8 May 2024. The IIA encourages stakeholders to have their say on the draft combined Internal Audit Code of Practice.
