The International Internal Audit Standards Board is reviewing public comments on the draft of the proposed Global Internal Audit Standards™ a major step in the multiyear project to comprehensively review and update The IIA’s International Professional Practices Framework (IPPF) including the International Standards for the Professional Practice of Internal Auditing.
After analyzing the responses and making necessary revisions, the Standards Board expects to release the new Global Internal Audit Standards™ officially before the end of 2023.
How Is The IPPF Changing?
The IPPF is the framework that includes the Global Internal Audit Standards, Guidance (mainly Global Practice Guides and Global Technology Audit Guides), and a newly proposed element being developed with global input: Topical Requirements
- The new Standards incorporate the five mandatory elements of the current framework (Mission of Internal Audit, Definition of Internal Auditing, Core Principles for the Professional Practice of Internal Auditing, Code of Ethics, and Standards) as well as one of the recommended (nonmandatory) elements, the Implementation Guidance. These will no longer exist as separate entities.
- The proposed Standards are not divided into “attribute” and “performance” categories and do not contain “interpretations” as a separate section of the standard. The “.A” and “.C” implementation standards have been incorporated into the main body of the proposed Standards. The numbering system and order of the Standards has changed completely.
- Guidance will still exist as a recommended element in the new IPPF, which allows for more in-depth attention to internal audit practices and subjects.
- Topical Requirements will be added to the IPPF to enhance the consistency and quality of internal audit services. Review the proposed Topical Requirements.
Here is an Overview of the 10 major changes being proposed:
- New name!
The International Standards for the Professional Practice of Internal Auditing® has been renamed the Global Internal Audit Standards.
- New structure.
The content from six elements of the current IPPF (Mission, Definition, Code of Ethics, Core Principles, Standards, and Implementation Guides) is all incorporated into the Global Internal Audit Standards and organized into five domains that more clearly indicate key roles and responsibilities:
- Purpose of Internal Auditing: Contains elements of the current Definition and Mission of Internal Audit.
- Ethics and Professionalism: Incorporates and builds upon the current Code of Ethics.
- Governing the Internal Audit Function: Focuses on the relationship between the board and the chief audit executive.
- Managing the Internal Audit Function: Focuses on the requirements for the chief audit executive to manage the internal audit function effectively.
- Performing Internal Audit Services: Focuses on performing assurance and advisory engagements.
- New sections in each standard.
Overall, the Global Internal Audit Standards were designed to provide more clarity and help internal auditors deliver high-quality performance. Each standard will include sections describing the requirements of the standard as well as considerations for implementing the requirements and considerations for providing evidence of conformance with the requirements. The “considerations for implementation” offer common and preferred practices for implementing the requirements, and the “considerations for evidence of conformance” are examples of recommended ways to demonstrate that the requirements have been implemented. These sections incorporate information from the existing Implementation Guides and other authoritative guidance and include nuances for the public sector and small internal audit functions, when appropriate.
- New Purpose of Internal Auditing.
The Purpose of Internal Auditing — the first domain in the new Standards — incorporates the Mission of Internal Audit and the Definition of Internal Auditing and for the first time addresses how internal auditing helps the organization serve the public interest.
- New Ethics and Professionalism domain and standards.
The Code of Ethics has been incorporated into the Ethics and Professionalism domain of the Standards. In addition, this domain contains standards on due professional care, professional skepticism, and minimum requirements for continuing professional development for all internal auditors.
- New Governing domain and standards.
The definition and use of the term “board” and the board’s role in governing the internal audit function has been clarified. Board responsibilities related to the internal audit function, which were implied or indirectly stated in the existing Standards, are stated more directly and clearly. These include responsibilities related to oversight of the performance of the chief audit executive and the internal audit function, including external quality assessments.
- New and different requirements for the quality assurance and improvement program.
There are new clarifications and requirements for the QAIP, including a description of the requirements for board oversight of the program and the requirement for at least one reviewer in an external quality review to be a Certified Internal Auditor (CIA).
- Special attention to the public sector.
“Public sector” is now defined in the proposed Standards glossary, and the new “considerations for implementation” section specifically addresses information to assist internal auditors in the public sector.
- Rigorous standard-setting process, with increased focus on stakeholders and public interest.
The public interest was considered intentionally when creating the new standard-setting process and the Purpose of Internal Auditing, as well as when updating other standards to consider stakeholders.
- New terms and revised and expanded Glossary.
To provide clarity, the proposed Standards introduce and define terms, such as “criteria,” “condition,” “finding,” “inherent risk,” “residual risk,” “risk tolerance,” and “root cause,” commonly used when performing internal audit services.
- New name!
- A Table of Contents lists out the sections of the Proposed Global Internal Audit Standards™
- A detailed mapping of statements and concepts from the International Standards for the Professional Practice of Internal Auditing (2017) to the Proposed Global Internal Audit Standards is available.
- A comparison of the Glossaries from the International Standards for the Professional Practice of Internal Auditing (2017) to the Proposed Global Internal Audit Standards is available.
- A one-page document to help chief audit executives clarify, raise awareness about, and emphasize the importance of the governance roles and responsibilities of the board that enable the internal audit function to achieve the Purpose.
- Insights to Quality by Warren Hersh: "Achieving Quality with the Proposed Global Internal Audit Standards"
- Press Release sent to the media on March 1
- The unique characteristics of the public sector are for the first time highlighted in the proposed standards.
Archive of 2022 resources:
- Global Perspectives and Insights: Updating Standards for a Changing World
- “The IIA’s Standards Are Evolving” by Judy Warner on InternalAuditor.org
- “Building a Better Auditor: Setting Internal Audit Standards in the Public Interest” by Dr. Lily Bi on InternalAuditor.org
- The Evolution of IPPF and International Standards
- Research and benchmarking as input for revisions to framework and standard-setting process.COMPLETED
- Outreach and engagement to receive input from broad variety of stakeholders. COMPLETED
- Revisions and development of new Standards. COMPLETED
2023 - Q1 - Q3
- Translation and release of draft for 90 days of public comment. Analysis and disposition of results. COMPLETED
2023 - Q4
- Approval of final draft. Translations begin.
- Updated Quality Assessment manual to be finalized, Q1.
- New IIA instructor-led training and updated learning library, Q1.
- Updated Internal Audit Practitioner exam to be ready, Q3.
- Updated IPPF Guidance to be issued.
New Standards become effective 12 (TBD) months from the release date.
In accordance with its governing process, at least once every three years, the International Internal Audit Standards Board is required to consider whether changes are needed to the International Standards for the Professional Practice of Internal Auditing. Starting in 2020, the Standards Board embarked on a project to review not only the Standards, but also the IPPF – the framework that contains the Standards – to determine whether they remained adequate to guide the current practices of internal auditing in today’s rapidly evolving global landscape. Based on extensive research and input, the Standards Board set out to revise the IPPF and the Standards in a way that would be responsive to the interests of stakeholders while also better guiding internal auditors and the organizations they serve.
The IPPF Evolution Project set out to accomplish five main goals:
- Simplify the structure of the IPPF.
- Clarify and align all elements.
- Ensure that the Standards and Guidance are timely, practical, and applicable and address emerging topics.
- Communicate and advocate the Standards to not only internal auditors, but also stakeholders and regulators.
- Enhance internal audit performance and quality and preserve and enhance organizational value.
The Standards Board also extensively researched global standard-setting bodies for benchmarking purposes and received advice from the IPPF Oversight Council regarding its standard-setting process. The Standards Board improved its standard-setting process to ensure it received adequate input from stakeholders, including consideration of the public interest.
In 2021 and 2022, the Standards Board solicited input from:
- 3,600 internal audit practitioners from 159 countries via a 2021 survey.
- Representatives from 115 IIA Global Affiliates via webinars, surveys, in-person and virtual Q&A sessions, and two Global Assembly meetings.
- More than 70 stakeholder organizations, including regulators and standard-setting bodies.
- 5,000 practitioners and interested participants who attended a public webinar detailing proposed changes.
In 2023, the Standards Board released the draft Global Internal Audit Standards™ with a survey, which were translated into more than 20 languages, to gather quantitative and qualitative data regarding the level of agreement with the proposed draft. The public comment period closed for all languages on June 26. More than 1,600 surveys were completed, representing a globally diverse population, with 69 percent of the survey respondents from regions outside North America and more than 25 percent of the surveys completed in a language other than English. One quarter of the respondents were organizations, each representing more than 280 individuals on average. Additionally, comment letters were received from more than 60 individuals and organizations. Feedback was also received through meetings and speaking engagements with more than 140 stakeholder group representatives; including board members, professionals in the audit and accounting fields from public and private organizations, other standard-setters, groups representing shareholders and investors, academics, and more.
Since early July, the Standards Board and IIA staff have formed working groups to analyze the responses and regularly meets to discuss the themes arising and to begin making potential adjustments to the draft. The Standards Board plans to approve a final draft before the end of 2023.
The International Internal Audit Standards Board is responsible for reviewing and updating the Standards on an ongoing basis. The Standards Board reviewed its standard-setting process to ensure its rigor, transparency, and responsiveness to stakeholders. The result was an increased focus on standard-setting in the public interest and an enhanced approach to soliciting and carefully considering input from stakeholders interested in the future of internal auditing standards.
The IIA has established a governing framework for setting the Standards that includes:
- A permanent structure (International Internal Audit Standards Board) that represents balanced, diverse, and global participation.
- Due process that promotes the development of timely, relevant, and high-quality standards to keep up with significant changes to the internal audit profession and simultaneously ensure transparency and meaningful accountability to stakeholders.
- Independent oversight by an independent oversight council (IPPF Oversight Council) to ensure that the Standards Board adheres to sound governance and due process, considers input from all stakeholders, and serves the public interest. Members of the Oversight Council include representatives from the International Federation of Accountants (IFAC), International Organization of Supreme Audit Institutions (INTOSAI), National Association of Corporate Directors (NACD), Organisation for Economic Co-operation and Development (OECD), and the World Bank.
The IPPF Oversight Council, together with The IIA, issued the “Framework for Setting Internal Audit Standards in the Public Interest” in March 2022.
The Standards will be effective for quality assessments 12 months after they are published. There are several options for conducting your next quality assessment. If your next assessment is due in 2023 or 2024, you should proceed with your assessment when due under the existing IPPF. If your assessment is due in 2024 or in 2025, you can choose to accelerate your assessment under the existing IPPF in 2023 or early 2024. If your assessment is due in 2025, you can elect to have a gap assessment performed by IIA Quality Services in 2024 to assess your readiness in implementing the new Standards.
The current quality assessment manual remains in effect and valid until updated. As the new Standards are established, a new quality assessment manual will be published in early 2024. It is anticipated that the new manual will provide direction on the new Standards as well as other guidance issued in support of the new Standards.
The CIA exam will not change before March 2025.
A more detailed answer cannot be provided until the Standards are finalized and The IIA’s Professional Certifications Board (PCB) assesses how the new Standards and other changes affecting the internal audit profession will impact the current CIA program. In late 2023, the PCB will determine how and when CIA exams should be updated. More information will be communicated at that time.
Other important information:
- The IIA will provide notice of changes to the CIA exam at least one year in advance of those changes taking effect.
- For candidates who are pursuing the CIA and have already passed one or more exams, there will be a transition period for candidates in progress, allowing ample time for them to complete the program they initially applied to. Detailed information and various scenarios will be provided to all in-process candidates with ample time to prepare and determine their best course of action.
- The CIA Learning System will not be updated before March 2025.
- Candidates seeking to obtain the CIA credential are encouraged to apply today.
There are no plans to update the CRMA exam, as this exam is not designed to test candidates’ knowledge of specific Standards requirements.
Internal Audit Practitioner exam
The IAP learning module and exam will not be updated before July 2024.