Auditing


  Proposed changes to guidance followed by internal auditors include a new mission statement and a set of 12 core principles that highlight what effective internal auditing looks like in practice.

The Institute of Internal Auditors (IIA) announced the proposed changes to the International Professional Practices Framework, which is promulgated by the IIA. The framework essentially is a blueprint supporting effective internal auditing.

The proposed new mission statement states that in each respective organization, internal audit strives “to enhance and protect organizational value by providing stakeholders with risk-based, objective and reliable assurance, advice and insight.”

Adding the proposed principles would give the framework an element that has not existed previously. Although the IIA’s standards always have been considered principles-based, those principles have not previously been articulated in the framework.

The task force that proposed the update concluded that the 12 principles, taken as a whole, articulate internal audit effectiveness. For an internal audit function to be considered effective, all 12 principles must be present and operating effectively, according to the task force.

Under the proposed core principles, an internal auditor or internal audit function would:

  1. Demonstrate uncompromised integrity.
  2. Display objectivity in mindset and approach.
  3. Demonstrate commitment to competence.
  4. Be appropriately positioned within the organization with sufficient organizational authority.
  5. Align strategically with the aims and goals of the enterprise.
  6. Have adequate resources to effectively address significant risks.
  7. Demonstrate quality and continuous improvement.
  8. Achieve efficiency and effectiveness in delivery.
  9. Communicate effectively.
  10. Provide reliable assurance to those charged with governance.
  11. Be insightful, proactive, and future-focused.
  12. Promote positive change.

The proposed changes would not affect the content of existing elements of the framework, such as the definition of internal auditing, the Code of Ethics, or the Standards for the Professional Practice of Internal Auditing. But the standards are constantly under evaluation and could be revised to support the proposed framework revisions.

The proposal is available on the IIA’s website at tinyurl.com/nrr458c. The organization is seeking comments by Nov. 3. If approved by the IIA Executive Committee and Global Board following the exposure period, elements of the new framework could be available in the first quarter of 2015, and a new framework could be available in 2016.


  The AICPA Auditing Standards Board (ASB) amended its auditing standard on letters for underwriters and certain other requesting parties.

The ASB did not originally intend to significantly change or expand AU Section 634, Letters for Underwriters and Certain Other Requesting Parties, when it was redrafted and issued as AU-C Section 920, Letters for Underwriters and Certain Other Requesting Parties, as part of the clarity project.

But the ASB issued Statement on Auditing Standards (SAS) No. 129, Amendment to Statement on Auditing Standards No. 122 Section 920, Letters for Underwriters and Certain Other Requesting Parties, as Amended, to amend AU-C Section 920 in order to address implementation issues and avoid unintended changes to previous practice.

SAS No. 129 becomes effective for comfort letters issued on or after Dec. 15, 2014. Early implementation is encouraged.

The SAS also contains additional amendments to further clarify AU-C Section 920.

An executive summary about the new SAS provides more details and is available on the AICPA’s website at tinyurl.com/ls5dxu9.

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