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www.theiia.org/Quality

. . . key messages for CAEs, SeniorManagement and the Board

Setting a Standard for

Quality


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Internal Auditing

Independent

Objective

Assurance and consulting activity

Adds value

Improves operations Helps accomplish objectives


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Internal Auditing

Brings a systematicand disciplined approachto evaluate and improve

the effectivenessof the

Governance,

Risk Management,& Control


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Adherence to the Standards.

Compliance with the Definition of InternalAuditing and the Code of Ethics.

Competency, evidenced by certification (CIA).

Maintaining a Quality Assurance andImprovement Program.

Relevance, ongoing professional development.

Professionalism Means:


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Internal Auditing and Quality

Nobody in the organization better understandsthe need for independent and objectiveassessment of quality than do the internalauditors.

They audit, review, and assess the work ofothers on a daily basis. They understand thegreat value this can bring to the entire

organization.


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The International Standards for the ProfessionalPractice of Internal Auditing mandate that theinternal audit activity be assessed for quality.

This presentation explains why quality is soimportant to internal audit professionalism andperformance.


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Q. Why is a quality assurance and improvementprogram necessary?

A. As an organization grows, its operationsundergo refinement, and its internalprocesses change and evolve, its qualitymonitoring process must keep pace.


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Q. What does a quality assurance andimprovement program include?

A. The required elements of the program areperiodic internal and external qualityassessments, ongoing internal monitoring,and assurance that the internal audit activityis complying with the Standards, the definition

of internal auditing and the Code of Ethics.(Standards 1300 & 1310)


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Q. What is a quality assessment?

A. A quality assessment, or QA, evaluatescompliance with the Standards, thedefinition of internal auditing, the Code ofEthics, the internal audit & audit committeecharters, the organizations governance,risk and control assessment, and the use of

successful practices.


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Q. Which organizations should obtain QAs?

A. All internal audit departments, even thoseoutsourced or co-sourced, must undergointernal & external quality assessments.


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Q. If an organization has not yet establisheda Quality Assurance and ImprovementProgram, how can it start the process?

A. A good first-step is to assess the level ofcompliance with the definition of internalauditing, the Standards and the Code ofEthics.

Practice Advisory 1300-1


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Q. How do internal and external QAs differ?

A.Internal Assessments comprise ongoinginternal evaluations of the internal auditactivity, coupled with periodic self-assessments and/or reviews.



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Q. How do internal and external QAs differ?

A. External Assessments require anoutside team of independent reviewers toevaluate compliance with the Standards,the definition of internal auditing, the Codeof Ethics, the use of successful practicesand the efficiency and effectiveness of the

internal audit activity. Practice Advisory 1312-1&2


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Q. What are the benefits of an independentexternal QA?

A. It allows the internal auditors to state thattheir activities are conducted in accordancewith the International Standards for theProfessional Practice of Internal Auditing.


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Q. How is an external QA conducted?

A. There are various acceptable methods ofperforming external QAs. One typicalmethodology includes advanced preparation,on-site activities, and the reporting process.


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Q. What are appropriate external QAapproaches?

A.Regardless of an organizations industry orthe internal audit activitys complexity orsize, there are two approved approaches forexternal QAs.

Practice Advisory 1312-1 External

Assessments Practice Advisory 1312-2 Self Assessment

with Independent Validation


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Q. What are the selection criteria for externalQA providers?

A. At a minimum, the QA provider should use amethodology that includes compliance withthe Standards, definition of internal auditingand the Code of Ethics as the benchmark forquality.


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Q. How do peer reviews fit into the QA process?

A. External quality assessments or selfassessments can be conducted through peerreviews instead of utilizing an externalservice providers.


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Q. What are the repercussions of not acquiringan external QA?

A. If the internal audit activity does not acquire

the external assessment at least every fiveyears, it is forbidden to use the phrase,conforms with the International Standardsfor the Professional Practice of Internal

Auditing, in its internal audit charter orreports.



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Q. What is the next step to the process if theresults of an external QA are positive?

A. Once the QA has been completed; the CAEmust communicate the results to the seniormanagement and the board. (Standard 1320)


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This presentationis from

The Institute of Internal Auditors

Global Headquarterswww.theiia.org

Questions?Contact - [email protected]

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