July 15, 2019
Published: International Accounting Bulletin
A draft code to strengthen corporate governance and help reduce the risk of major corporate collapses in the UK by boosting the status, standards, scope and skills of internal audit has been launched by the Chartered Institute of Internal Auditors. The institute is now seeking feedback and is running a programme of online public consultation over its proposals.
The Internal Audit Code of Practice marks the first time that UK businesses and organizations outside of the financial services sector, will be given comprehensive benchmarks to meet and detailed guidance about running an effective internal audit function.
The draft Internal Audit Code of Practice makes 30 recommendations to strengthen corporate governance including:
– Unrestricted access for internal audit. Internal audit should not be stopped from looking at any part of the organisation it serves.
– Full access for internal audit to senior meetings including the right to attend executive committee meetings.
– Full access for internal audit to key management information.
The Internal Audit Code of Practice is being developed by an independent Steering Committee set up by the Chartered Institute of Internal Auditors, chaired by Brendan Nelson – Audit Committee Chair of BP.
The draft Code builds on the Chartered Institute of Internal Auditors’ work in developing a Financial Services Code in 2013. Within two years, the Code had raised the scope and standing of internal audit in financial services with the number of Chief Audit Executives attending Executive Committees rising from 48% to 84% and the number of organisations carrying out audit work on risk culture rising from 54% to 93%.
Internal Audit Code of Practice Steering Committee Chair, Brendan Nelson said: “One of the best ways to help organisations better protect their assets and manage risk is to boost the status, standards, scope and skills of internal audit.
“The draft Internal Audit Code of Practice contains 30 recommendations to strengthen corporate governance including unrestricted access for internal audit, full access for internal audit to senior meetings and full access for internal audit to key management information. The draft Code offers invaluable guidance about raising internal audit performance to help businesses and other organisations protect their assets, reputation and sustainability.”