IIA aims to overhaul internal audit standards

The Institute of Internal Auditors released for public comment Wednesday a draft of the proposed changes it wants to make to its International Professional Practices Framework, especially its International Standards for the Professional Practice of Internal Auditing. 

The 90-day public comment period opened Wednesday and runs through May 30. The IIA previewed the proposed changes in an email last week (see story). One of the changes involves the name, with the International Standards for the Professional Practice of Internal Auditing being renamed the Global Internal Audit Standards.

The public comment draft represents the latest step in the IIA's IPPF Evolution Project, which it began in 2020. As part of that effort, the IIA has reached out to thousands of internal audit practitioners and stakeholders, including regulators, corporate directors and standard-setting bodies around the world.

"Effective professional standards aren't — and can't be — static," said IIA president and CEO Anthony Pugliese in a statement. "In addition to making the standards clearer and easier to use, we've also made sure the new draft standards reflect the rapidly-changing business landscape and the ever-expanding scope of internal audit work. I'm excited for the release of the public comment draft and hopeful the profession will rally around the new standards."

Along with proposing extensive changes to the standards themselves, the proposal groups the standards into five domains under the newly named Global Internal Audit Standards:

• Domain I: "Purpose of Internal Auditing" lays out how internal auditing helps organizations achieve success and the conditions that make internal auditing most effective.
• Domain II: "Ethics and Professionalism" incorporates the code of ethics and the current standards relating to practitioner conduct and is enriched by addressing due professional care.
• Domain III: "Governing the Internal Audit Function" clarifies the board's role. This change outlines important board responsibilities in support of an effective internal audit function and addresses how the chief audit executive can support the board in carrying out its responsibilities.
• Domain IV: "Managing the Internal Audit Function" clarifies the CAE's role and the responsibilities for effectively managing an internal audit function.
• Domain V: "Performing Internal Audit Services" includes additional requirements and practices to ensure internal auditors provide high-quality services.

"The unprecedented scope of our research and engagement with internal auditors has resulted in a draft that includes significant enhancements to the standards," said J. Michael Peppers, chairman of the International Internal Audit Standards Board, in a statement. "For decades, global internal audit professionals have relied heavily upon the framework and standards contained in the IPPF. The new standards will ensure that future generations of internal auditors will uphold the profession's well-earned reputation for exceeding stakeholder expectations and adding value to their organizations."

The IIA is asking internal auditors and stakeholders to send feedback on the proposed changes to help with continued development of the new standards. The final standards are expected to be issued in late 2023 and to take effect 12 months after they're released.

The exposure draft, along with instructions for providing feedback, is available here.