The Institute of Chartered Accountants of India (ICAI) has released a new set of professional standards on conducting internal audits that are intended to provide guidance to its members on issues that may emerge during the course of the audit process.
The standards, titled “Basic Principles of Internal Audit” and which were prepared by the ICAI’s Internal Audit Standards Board, are “primarily designed to provide guidance on matters of implementation or clarification on their applicability in certain circumstances,” the ICAI said in a statement. Along with the Institute of Internal Auditor’s core principles, the ICAI standards offer internal auditors some good rules of thumb to guide behaviors and decision making.
“There are a set of core principles fundamental to the internal audit function and activities. These basic principles of internal audit are critical to achieve the desired objectives asset out in the definition of internal audit,” the new standards state.
The standards list these basic principles and provide additional insight on each. They are:
- Independence
- Integrity and objectivity
- Due professional care
- Confidentiality
- Skills and competence
- Risk-based auditing
- System and process focus
- Participation in decision making
- Sensitivity to multiple stakeholder interests
- Quality and continuous improvement
The ICAI says the implementation of the professional standards are voluntary and that the guides are recommendatory in nature. “The internal auditor should ordinarily follow these recommendations except where, under particular circumstances, it may not be necessary or appropriate to do so,” it states in the release.
The standards also include some specific language on the internal auditor’s responsibilities in regard to fraud. They state that the internal auditor should document fraud risk factors identified as being present during the internal auditor’s assessment process and document the internal auditor’s response to any other factors. “If during the performance of the internal audit fraud risk factors are identified that cause the internal auditor to believe that additional internal audit procedures are necessary, the internal auditors hould document the same,” the ICAI stated in the release.
The full text of the Basic Principles of Internal Audit can be found here. 