The IIA has long recognized the inevitability of change in the profession of internal auditing. Listening to its members and stakeholders, The Institute keeps a finger on the pulse of the profession worldwide and responds with guidance to address internal auditing’s evolving role and challenges. Based on the foundation of the original Statement of Responsibilities of the Internal Auditor issued in 1947, the Code of Ethics adopted in 1968, and the first set of
Standards for the Professional Practice of Internal Auditing (Standards) approved in 1978, The IIA has built a strong and flexible framework that guides the work of internal auditors.
As the profession has changed, so has the structure of The IIA’s professional guidance. Throughout its history, The IIA has proactively chartered task forces to evaluate the adequacy of its guidance and to recommend potential enhancements. Members, volunteers, and stakeholders play pivotal roles in the development, adoption, and promulgation of IIA guidance. These collective efforts have helped shape the framework, from its early beginnings to its most recent July 2015 update.
A Framework With Vision
Perhaps one of the most significant developments in the history of IIA guidance started in 1997, when a Guidance Task Force was appointed to evaluate whether a gap existed between evolving internal audit practice and the
Standards, and whether the guidance development process could be improved. In its report, A Vision for the Future, the task force recommended the adoption of a comprehensive, flexible professional practices framework and a broader, more proactive definition of internal auditing. The definition that subsequently emerged, and remains in place today, encompassed both assurance and consulting services, included the concept of adding value, and expanded internal auditing’s organizational focus to include risk management and governance processes. The task force also proposed organizing the Standards into the categories used to this day — attribute, performance, and implementation standards — and endorsed periodic quality assurance reviews and continuing education as requirements for conformance.
A Vision for the Future proved an apt title, offering a forward-looking premise that formed the basis for the development of The IIA’s Professional Practices Framework (PPF). Released in 2002, the framework remained adaptable enough to serve as an effective guide for many years afterward.
Adapting to Change
Although consulting services had gained the spotlight by the turn of the millennium, high-profile fraudulent financial reporting and bankruptcy cases involving global organizations made it increasingly important that the internal audit activity demonstrate its professionalism, independence, and ability to provide objective assurance, while continuing to add organizational value. Fortunately, the PPF’s structure enabled internal auditors to manage these competing demands. The development of implementation standards throughout the early 2000s provided guidance for applying attribute and performance standards specifically to either assurance or consulting engagements.
With the addition of “international” to the framework’s name, the International Professional Practices Framework (IPPF), released in 2009, brought with it a more consistent, transparent, and rigorous due process for the development of authoritative guidance, involving regular cycles of review by an internationally representative IIA committee. IPPF changes released in the framework’s 2011 and 2013 iterations fine-tuned elements aimed at enhancing the positioning and professionalism of the internal audit activity.
In 2014, the work of the IPPF Relook Task Force inspired the addition of two new IPPF elements: the Mission of Internal Audit and Core Principles for the Professional Practice of Internal Auditing. A new IPPF graphic depicts the Mission encircling the other elements of the framework and the Core Principles comprising part of the framework’s core, along with the Definition, Code of Ethics, and Standards.
As new mandatory guidance, the Core Principles embodies the essence of what makes internal auditing effective, quality-based, and value-focused. The Mission of Internal Audit articulates what internal auditing aspires to accomplish. Together, the new elements offer a concise summary of how internal audit contributes to an organization.
And contributing to an organization is the heart of internal auditing. As practitioners have recognized the value added by expanding their focus to the broader processes of risk management, control, and governance, The IIA has responded by developing a strong, flexible, internationally pertinent guidance framework that continues to evolve to meet the challenges faced by internal auditors and their stakeholders.