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Pulse of Internal Audit: Strong Foundations
About the Pulse of Internal Audit
RESPONDENT DEMOGRAPHICS
Internal Audit Position Industry Groupings *
Organization Type Internal Audit Function Size (FTEs)
*Industry groupings were defined as follows: Industrial — manufacturing; construction; utilities; mining, quarrying, and oil and gas extraction; transportation and warehousing; waste management/remediation services. Services — health care; retail trade; real estate; accommodation and food; wholesale trade; entertainment; information; professional; agriculture. Government and education — public administration and educational services. Finance and insurance — financial institutions, insurance, asset management, broker-dealers.
86%
14%CAE
Director/seniormanager
43%
22% 21%
14%
Publicly traded Public sector Private sector Nonprofit
27%33%
24%
10%6%
1 to 3 4 to 9 10 to 24 25 to 49 50 or more
28%
28%
24%
20%
Finance andinsurance
Services
Industrial
Government andeducation
Number of Responses
CAEs 460
Director/senior managers
78
Total 538
www.theiia.org/pulse 3
Contents
Introduction ....................................................................................................................................................... 4
Section 1: The Cornerstones of a Strong Foundation ..................................................................................... 5
Resources ................................................................................................................................................... 5
Competence ............................................................................................................................................... 6
Structure ..................................................................................................................................................... 8
The International Standards for the Professional Practice of Internal Auditing ..................................... 9
Section 2: Other Mandatory Guidance .......................................................................................................... 10
Definition of Internal Auditing ................................................................................................................ 10
Code of Ethics .......................................................................................................................................... 10
The Core Principles for the Professional Practice of Internal Auditing ................................................. 11
Section 3: Delivering World-class Internal Auditing ...................................................................................... 12
Conclusion ....................................................................................................................................................... 14
The International Professional Practices Framework .................................................................................... 15
Appendix .......................................................................................................................................................... 16
Notes ................................................................................................................................................................ 18
ABOUT THE AUDIT EXECUTIVE CENTER
DISCLAIMER
COPYRIGHT
4 Pulse of Internal Audit: Strong Foundations
NOTE TO THE READER
INTERNAL AUDIT
ACTIVITY
Introduction
enough
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STANDARD
APPLYING THE
STANDARDS
Section 1: The Cornerstones of a
Strong Foundation
RESOURCES
STAFFING
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SUPPLEMENTAL
GUIDANCE
DEMONSTRATING
COMPETENCE
EXHIBIT 1: GLOBAL INTERNAL AUDIT COMPETENCY FRAMEWORK
Source: The IIA’s Global Internal Audit Competency Framework, available at
www.theiia.org. ©2013 Institute of Internal Auditors, Inc.
TRAINING
AUDIT SKILLS
Improvement and Innovation
Internal Audit Delivery
Personal Skills
Communication Persuasion and
Collaboration Critical Thinking
Technical Expertise
IPPF Governance, Risk,
and Control Business Acumen
Internal Audit Management
Professional Ethics
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INDEPENDENCE THE INTERNATIONAL STANDARDS FOR THE PROFESSIONAL PRACTICE OF INTERNAL AUDITING
INDEPENDENCE AND OBJECTIVITY
10 Pulse of Internal Audit: Strong Foundations
IPPF Section 2: Other Mandatory
Guidance
DEFINITION OF INTERNAL AUDITING
CODE OF ETHICS
www.theiia.org/pulse 11
MISSION OF INTERNAL
AUDIT
THE CORE PRINCIPLES FOR THE PROFESSIONAL PRACTICE OF INTERNAL AUDITING
.
CORE PRINCIPLES
12 Pulse of Internal Audit: Strong Foundations
IIA QUALITY SERVICES Section 3: Delivering World-class
Internal Auditing
www.theiia.org/pulse 13
www.theiia.org/pulse 15
The International Professional Practices Framework
All elements of the IPPF, including Implementation Guidance
and Supplemental Guidance, are free to IIA members.
16 Pulse of Internal Audit: Strong Foundations
Appendix Exhibit A: Internal Audit FTE Employees by Organization Type
Note: Q35: Approximately how many full-time equivalent employees make up your internal audit department? CAEs
and directors, North America. n = 520.
Exhibit B: Internal Audit Activities with Budget Increases or Decreases by Sector
Note: Q38: Looking back over the past 12 months, did the budget of your internal audit function increase, stay the
same, or decrease? CAEs and directors, North America. n = 512.
37%
36%
31%
27%
15%
26%
34%
38%
30%
29%
36%
33%
22%
14%
35%
23%
28%
25%
7%
12%
4%
21%
21%
16%
Public sector
Privately held
Nonprofit
Financial services
Publicly traded
All respondents
1 to 3 4 to 9 10 to 24 25 or more
49%47%
37%35%
24%
40%
12%
8%
20%
13% 14% 14%
Financial services Nonprofit Publicly traded Public sector Privately held All respondents
Increased budget in 2016 Decreased budget in 2016
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Appendix (continued)
Exhibit C: Methods of Training for Internal Auditors
Note: Q42: What methods of external training do you plan to use for each level of internal audit staff? (Select all that
apply.) CAEs and directors, North America. n = 535.
Exhibit D: Functional and Administrative Reporting Lines
Note: Q33: What is the primary administrative reporting line for the chief audit executive (CAE) or head of internal audit in your
organization? Q34: What is the primary functional reporting line for the chief audit executive (CAE) or head of internal audit in your
organization? CAEs and directors, North America. n = 520.
87%
50%45%
67%
49%
41%
60% 61%
50%
Conferences In-house training On-demand courses
Director Manager Staff
88%
6%
5%
33%
4%
39%
3%
18% 4%
Functional
Administrative
Board, audit committee CEO, president, agency head CFO, vice president of finance Other chief officers Other
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