Standard 1000-purpose, authority and responsibility

Standard 1000-purpose, authority and responsibility

We discuss the purpose, authority and responsibility in this section.

The objectives, powers and responsibilities of the internal audit activity must be in accordance with the mission of internal audit and the requirements of IPPF (basic principles of internal audit work, code of professional conduct, standards and definition of internal audit).

be formally defined in the internal audit charter.

The internal audit manager must periodically review the internal audit charter and submit it to senior management and the board of directors for approval.

Interpretation:

* The internal audit charter is an official document that defines the objectives of the internal audit activity, powers and responsibilities.

* The charter of internal audit determines the place of internal audit activity in the organization, access rights to documents, people and physical assets related to the performance of the audited activity and defines the scope of internal audit activity.

* The final approval of the internal audit charter was given to the board of directors.

the beginning

The internal audit charter is a very important document;

Because, it records the agreement about the purpose, authority and responsibility of the internal audit unit of an organization.

In order to create this document, the internal audit manager must consider the internal audit mission and the required elements of the framework published by the Association of Internal Auditors, including the fundamental principles of the professional practice of internal auditing, the code of professional conduct, the international standards of the professional practice of internal auditing and the definition of internal auditing. has understood

This recognition provides a basis for dialogue between the chief audit executive, senior management and the board of directors to mutually agree on the following:

*Operational objectives and responsibilities of internal audit.

* Expectations governing the internal audit unit.

* Functional and administrative reporting lines of the internal audit manager

* Levels of necessary authority (including access to documents, physical assets and employees) for the internal audit unit and the fulfillment of agreements made regarding operational goals and responsibilities.

The internal audit manager may need to exchange opinions with the legal advisor and the secretary of the board about the charters and how to effectively and efficiently present the proposed internal audit charter for approval by the board of directors.

Executive considerations

The internal audit manager (or his representative), based on the agreement regarding the elements mentioned above, drafts the internal audit charter.

Accountant Association Internal has proposed a sample of the internal audit charter.

which can be used as a guide.

Although charters can be different depending on each organization, they usually include the following sections:

Introduction:

To describe the general and professional role of the internal audit unit, related elements are described in the framework, which is often placed in the introduction section.

Authority:

To specify the internal audit unit’s full access to documents, physical assets and employees, which is necessary to perform audit work, the internal auditor’s accountability regarding the protection of assets and compliance with confidentiality.