Internal Audit Standard 1120 – Individual Impartiality

Standard 1120 individual impartiality

According to Standard 1120 of individual impartiality, internal auditors must behave in a non-biased and non-biased manner and avoid conflict of interest.

Interpretation:

A conflict of interest is a situation where the trusted internal auditor has a personal interest or is in professional competition.

Such competing interests can make it difficult to carry out his duties impartially.

Conflict of interest, even if no unethical or inappropriate action is done, there is a conflict of interest that reduces confidence in the internal auditor’s work and internal audit activity.

And it weakens the internal auditor’s ability to impartially perform assigned duties and responsibilities.

Revised standards, effective from January 1, 2017

the beginning

Impartiality refers to the unbiased and unbiased mindset of the internal auditor.

which is facilitated by avoiding conflict of interest.

Therefore, to implement this standard, the internal audit manager must first understand the policies and activities that can increase or limit such a mentality within the organization and within the internal audit unit.

For example, many organizations have standardized performance evaluation processes and compensation policies, as well as employee conflict of interest policies.

The internal audit unit is often able to pay attention to its special roles.

Adapt these policies and may have other policies such as policies that determine training requirements.

In relation to his department, the internal audit manager must understand the nature of the relevant policies identified.

and consider their potential impact on internal audit impartiality.

Executive considerations

To effectively manage internal audit impartiality, many internal audit managers have a practical manual or manual of internal audit policies.

in which the governing expectations and requirements related to having an unbiased mindset are provided for all internal auditors.

Such an instruction may explain the following

• The special importance of the concept of impartiality from the point of view of the internal audit profession
• Situations that can normally reduce impartiality, such as, auditing a department where an internal auditor has recently worked;

auditing a family member or close friend; Or to assume without evidence that the audited department is acceptable based only on previous positive experiences.

• Actions that the internal auditor should take if aware of current or potential concerns related to impartiality.

including talking to the senior manager or middle manager of internal audit about the concerns.

• Reporting requirements that every internal auditor periodically considers and discloses conflicts of interest.

Most procedures specify that internal auditors recognize conflicts of interest policies and disclose potential conflicts.

The signature of the annual statement by the internal auditors indicates that there is no potential threat or that any known potential threat is stated.