IIA Releases Draft of New Professional Practice Standards

The Institute of Internal Auditors (IIA) released a draft on proposed changes to the International Professional Practices Framework (IPPF) for public comment, with focus on the International Standards for the Professional Practice of Internal Auditing. The 90-day public comment period opens today and runs through May 30.

The public comment draft is the next step in the IPPF Evolution Project, an extensive research effort launched in 2020 that has engaged thousands of internal audit practitioners and stakeholders, including regulators, corporate directors, and standard-setting bodies from across the globe.

See, “IIA Gives Sneak Peek at Overhaul to Its Professional Standards”

“The unprecedented scope of our research and engagement with internal auditors has resulted in a draft that includes significant enhancements to the Standards,” said J. Michael Peppers, chairman of the International Internal Audit Standards Board. “For decades, global internal audit professionals have relied heavily upon the framework and Standards contained in the IPPF. The new Standards will ensure that future generations of internal auditors will uphold the profession’s well-earned reputation for exceeding stakeholder expectations and adding value to their organizations.”

Beyond the extensive changes to the Standards themselves, the public comment draft articulates the keys to effective internal auditing by grouping the Standards into five domains under the newly named Global Internal Audit Standards:

• Domain I: Purpose of Internal Auditing articulates how internal auditing helps organizations achieve success and the conditions that make internal auditing most effective.
• Domain II: Ethics and Professionalism incorporates the Code of Ethics and the current Standards relating to practitioner conduct and is enriched by addressing due professional care.
• Domain III: Governing the Internal Audit Function clarifies the board’s role. This change outlines important board responsibilities in support of an effective internal audit function and addresses how the chief audit executive (CAE) can support the board in carrying out its responsibilities.
• Domain IV: Managing the Internal Audit Function clarifies the CAE’s role and the responsibilities for effectively managing an internal audit function.
• Domain V: Performing Internal Audit Services includes additional requirements and practices to ensure internal auditors provide high-quality services.

“Effective professional standards aren’t—and can’t be—static,” said Anthony Pugliese, President and CEO of The IIA. “In addition to making the Standards clearer and easier to use, we’ve also made sure the new draft Standards reflect the rapidly-changing business landscape and the ever-expanding scope of internal audit work. I’m excited for the release of the public comment draft and the opportunity for practitioners and stakeholders to help shape the future of our profession by sharing their feedback.”

Summary of Proposed Changes

The IIA offered a high-level summary of the proposed changes and the goals of the new edition of the standards. They are:

• Simplify the structure of the standards.
• Consolidate the six existing elements in the new standards, including Mission, Definition, Code of Ethics, Core Principles, Standards, and Implementation Guides.
• Create a new section on the “Purpose of Internal Auditing.”
• Enrich the Ethics and Professionalism sections by adding “due professional care.”
• Add nuances for public sector, small internal audit functions, and advisory services.
• Clarify the board’s role in governing the internal audit function.
• And more.

Feedback from the public comment period will inform the continued development of the new Standards. The final Standards will be issued in late 2023 and take effect 12 months after release.

The full version of the exposure draft of the new Standards, with instructions for providing feedback, is available at theiia.org/IPPFEvolution. 

Joseph McCafferty is editor & publisher of Internal Audit 360°