Standards

-Delineate the basic principles that represent the practice of internal auditing
-Provide framework for performing and promoting a broad range of value added int
ernal auditing
-Establish a basis for evaluation of internal auditing performance
-Foster improved organizational process and operations
Attribute standards- Addresses the attribute of organizations and individuals pe
rforming internal auditing
Performance Standards- Describe the nature of internal auditing, provide a quali
ty criteria against w/c performance of these services can be measured
Implementation Standards- Expand the Att. & Perf. Standards by providing require
ment to assurance and consulting activity
IA Charter- Formal document that defines the IA activity's purpose, Authority an
d Responsibility
- Establishes IA activity's position w/in the organization
- Nature of reporting of CAE to the BOD
- Authorizes access to personel,records and physical properties relevant to the
performance of engagements
- Scope of internal audit
- Nature of assurance services & Consulting activity must be defined in the IA
charter
*If assurances are to be provided by third party, the nature must also b
e defined in the IA Charter
- Definition of IA, CoE,and standards
* CAE- Must periodically review the IA charter
* Final approval of IA charter resides with the board
Internal audit Activity must be independent
* Must have direct and unrestricted access to senior mgt and the BOD
*CAE must confirm to the board about the org. independence atleast annually
*CAE Functionally reports to the BOD
Impairment
* If independence is impaired, The details must be disclosed to appropriate par
ties.
- conflict of interest, scope limitations, Restrictions on access to reco
rds, personnel, properties & Resource limitations
*Internal auditor must refrain from specific operations that they were previous
ly responsible in the prev. year
- they can provide consulting activities w/ they had previous responsibi
lities
Quality assurance and Improvement
* CAE must develop and maintain quality assurance and improvement program
* Internal and External Assessments
Internal Assessments
- Ongoing monitoring of the perf. of the IA activity
- Periodic assessments by other persons w/in the organization with sufficient k
nowledge in IA practices
External Assessments
- Conducted atleast once every 5 yrs by a qualified independent assessor
- CAE must discuss w/ the BOD the ff
* Form and frequency of external assessment

* Qualification & independence of external assessor or assessment team

CAE MUST Communicate the result of the quality assurance and improvement program
to the senior mgt and the board
PERFORMANCE STANDARDS
- CAE must establish a risked based plan to determine the priorities of the inte
rnal audit activity
- CAE must establish policies and procedures to guide the IA Activity
Control- The actions taken to manage risk and increase the likelihood that estab
lished objectives and goals will be achieved
Control Environment - for the attitudes and actions of the board and management
regarding the
significance of control within the organization
Control processes- the policies, procedures, and activities that are part of a c
ontrol framework, designed to ensure that risks are
contained within the established risk tolerances