As a profession, internal auditors look to the Institute of Internal Auditors (IIA) Standards to provide guidance on how to most effectively execute their fiduciary role.  Part One of this series introduced the overall Standards, Mandatory Guidelines, Core Principles, Code of Ethics and Attribute Standards.  These are important concepts that internal auditors, management and the board should understand.  These guidelines provide the foundation for the profession and are written to ensure effectiveness and consistency in the execution of internal auditing.

This segment will focus on two elements of the Performance Standards which include:  managing the internal audit function and the nature of work considered within the realm of internal auditing.  Each of these components are critical to the effective execution of internal audit’s responsibilities. 

Requirements for managing internal audit extend far beyond managing a specific project or individual audit.  It includes management of the entire audit process from development through to execution and reporting.  It also includes:

• Ensuring the team has the relevant knowledge and expertise for engagement assignments
• Appropriate resourcing and budgeting exists to support the Mission of the function
• Establishing the right communication protocols with management and the board. 

When examining the nature of work of internal audit, the Institute of Internal Auditors Standards outline three very critical areas that internal auditors should be engaged with.  These include:

• Controls
• Risk Management
• Governance

Inherently, most individuals within management understand the requirements around internal audit’s evaluation of controls, but many struggle with how or if internal audit should be involved in risk management and governance activities.

This course delves deeper into managing the internal audit activity and the challenges that may be faced along with properly identifying internal audit's nature of work.  The participant will come away with an appreciation for the intent of the Standards and a recognition of alternatives to promoting the value oriented activities internal audit can provide to an organization.