CHIEF AUDIT EXECUTIVE (CAE)
A person in the senior position responsible for
effectively managing the internal audit
activity
in accordance with the Internal Audit Chapter
and the Definition of Internal Auditing, the
Code of Ethics and the Standards.
Specific Responsibilities of the CAE
Planning
Communication and Approval
Resource Management
Policies and Procedures
Coordination
Reporting to the Board and Senior Management
PLANNING
The Chief Audit Executive should establish risk-based plans.
The PLANNING process involves establishing:
Goals
Engagement work schedules
Staffing plans and financial budgets
Activity reports
COMMUNICATION AND APPROVAL
The CAE should submit the following an
nually to senior management for approv
al, and to the board for its information:
Summary of internal audit activitys w
ork schedule
Staffing plan
Financial budget
Interim changes
RESOURCE MANAGEMENT
The CAE should establish a
program
for
selecting
and
developing the HR of the internal
audit activity. The program
should provide for:
Job descriptions
Selection of qualified
competent individuals
Training
Performance appraisal
Counsel
and
Skills Required of Internal
Auditors
COGNITIVE SKILLS
a. Technical Skills
b. Analytic Skills
c. Appreciative Skills
BEHAVIORAL SKILLS
d. Personal Skills
e. Interpersonal Skills
f. Organizational Skills
POLICIES AND PROCEDURES
It should be appropriate to the size and structure of the internal
audit activity and the complexity of its work.
Includes:
Personnel Manuals
Audit/Technical Manuals
Administrative Policy and Procedure Manuals
COORDINATION
The CAE should share information and coordinate
activities with other internal and external providers of
relevant assurance and consulting services.
REPORTING WITH SENIOR
MANAGEMENT AND THE BOARD
Activity reports should highlight significant engagement
observations and recommendations and significant deviations.
THE INTERNAL AUDIT CHARTER
It is a formal document that defines the internal audit
activitys
purpose, authority and responsibility.
It establishes the IA activitys position within the
organization;
authorizes access to records, personnel, and physical
properties relevant to the performance of engagements; and
defines the scope of IA activities.
THE INTERNAL AUDIT COMMITTEE
(IAC)
It refers to the governance body that is charged with
oversight of the organizations audit and control functions.
THE IIAS PROFESSIONAL
PRACTICES
FRAMEWORK (PPF)
It is a conceptual framework that
organizes authoritative guidance
promulgated by the IIA.
Components of
Strongly Recommended Elements
of PFF
POSITION PAPERS
Assist a wide range of interested parties in understanding of
significant governance, risk or control issues, and delineating the
related roles
and responsibilities of internal auditing.
PRACTICE ADVISORIES
Assist internal auditors in applying the Definition of IA, the Code of
Ethics, and the Standards, and promoting best practices.
PRACTICE GUIDES
Provide detailed guidance for conducting IA activities.
COMPONENTS:
1. Principles
Integrity
Objectivity
Confidentiality
Competency
2. Rules of
Conduct
It states the principles and expectations
governing behavior of individuals and
organizations
in the conduct of internal auditing.
Threats to Objectivity
These are situations that threaten the ability of the IA
activity to carry out responsibilities in an unbiased
manner.
Framework:
1. Identify threat.
2. Assess threat.
3. Identify mitigating factors.
4. Assess residual threat.
5. Manage residual threat.
6. Identify unresolved threat.
7. Identify disclosure
requirement.
8. Ex-post review and reporting.
Standards
A professional pronouncement promulgated
by the IA Standards Board that delineates the
requirements for performing a broad
range of IA activities and for evaluating IA
performance.
Contents of Standards
ATTRIBUTE STANDARDS
PERFORMANCE STANDARDS
Purpose, authority and responsibility
Managing the internal audit activity
Independence and objectivity
Nature of work
Proficiency and due professional care
Engagement planning
Commitments to quality assurance and
improvement
Performing the engagement
Communicating results
Monitoring progress
Managements acceptance of risks
THE INTERNAL AUDITING
STANDARDS
BOARD (IASB)
The official body charged by the IIA with developing
professional standards for internal auditing.
Provides guidance to practitioners.
THE INSTITUTE OF INTERNAL
AUDITORS (IIA)
The IA professions leader in certification,
education, research, and technological guidance.
