This statement was issued by the Institute of Internal Auditors.
The purpose of this statement is to provide in summary form a general understanding of the responsibilities of internal auditing. For more specific guidance, readers should refer to the Standards for the Professional Practice of Internal Auditing.
Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. The members of the organization assisted by internal auditing include those in management.
The scope of internal auditing should encompass the examination and evaluation of the adequacy and effectiveness of the organization's system of internal control and the quality of performance in carrying out assigned responsibilities. Internal auditors should:
The internal auditing department is an integral part of the organization and functions under the policies established by senior management. The purpose, authority and responsibility of the internal auditing department should be defined in a formal written document (charter). The director of internal auditing should seek approval of the charter by senior management. The charter should make clear the purposes of the internal auditing department, specify the unrestricted scope of its work, and declare that auditors are to have no authority or responsibility for the activities they audit.
Throughout the world internal auditing is performed in diverse environments and within organizations which vary in purpose, size, and structure. In addition, the laws and customs within various countries differ from one another. These differences may affect the practice of internal auditing in each environment. The implementation of the Standards for the Professional Practice of Internal Auditing, therefore, will be governed by the environment in which the internal auditing department carries out its assigned responsibilities. Compliance with the concepts enunciated by the Standards for the Professional Practice of Internal Auditing is essential before the responsibilities of internal auditors can be met. As stated in the Code of Ethics, members of The Institute of Internal Auditors, Inc. and Certified Internal Auditors shall adopt suitable means to comply with the Standards for the Professional Practice of Internal Auditing.
Internal auditors should be independent of the activities they audit. Internal auditors are independent when they can carry out their work freely and objectively. Independence permits internal auditors to render the impartial and unbiased judgments essential to the proper conduct of audits. It is achieved through organizational status and objectivity.
The organizational status of the internal auditing department should be sufficient to permit the accomplishment of its audit responsibilities. The director of the internal auditing department should be responsible to an individual in the organization with sufficient authority to promote independence and to ensure a broad audit coverage, adequate consideration of audit reports, and appropriate action on audit recommendations.
Objectivity is an independent mental attitude which internal auditors should maintain in performing audits. Internal auditors are not to subordinate their judgment on audit matters to that of others. Designing, installing, and operating systems are not audit functions. Also, the drafting of procedures for systems is not an audit function. Performing such activities is presumed to impair audit objectivity.
The Statement of Responsibilities of Internal Auditing was originally issued by
The Institute of Internal Auditors in 1947. The current Statement, revised June 1999,
embodies the concepts previously established and includes such changes as are
deemed advisable in light of the present status of the profession.
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