​IPPF Relook: Changing Times Require a Fresh Perspective

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Sooner or later, every internal auditor will ask why something is being done a certain way, only to be met with a look of surprise and an answer that goes something like, "Um, because we have always done it that way." But it's in the internal auditor's DNA to bring a fresh perspective — a fresh set of eyes — to the table and point out what others might miss.

That's why The IIA has been taking a fresh look at our own International Professional Practices Framework (IPPF), the blueprint for the standards and guidance promulgated by The IIA.

I was fortunate to have chaired the International Internal Auditing Standards Board and know personally from that experience that thousands of hours of hard work went into creating the IPPF, and that some of the most talented internal auditors on the planet were involved. It was a long and exhaustive project, and we were confident of the results. But that was more than 12 years ago, and the world and profession have changed a lot since then. As The IIA has done periodically since the forerunner of the IPPF was first adopted in the 1970s, a global task force of internal audit's best was charged with reviewing the framework, a process that extended over the past several months.

The task force, in the context of not only what issues the profession had tackled in the past but in what may lie ahead, concluded that there are opportunities to enhance the IPPF.

The task force determined, for example, that while the Definition of Internal Auditing does a good job of articulating what internal audit is, the IPPF does not specifically describe the mission of internal auditing. This is an important distinction, particularly when viewing how internal audit can properly serve an organization when, for instance, it might have dual reporting obligations to a board or audit committee as well as to executive management.

The task force also concluded that, if internal audit standards are principles-based, then those principles should be clearly defined and aligned directly to the relevant standards. Through much discussion and debate, the task force did just that, drafting 12 core principles that can be mapped to the existing standards. Again, with an eye to the future, some members of the task force pointed out that additional standards might be needed in the short and long term to support some of the principles.

It's crucial for internal audit to be nimble, to anticipate potential impacts on the profession rather than to only react. To this end, I am pleased that the task force also proposes Emerging Issues Guidance as part of an enhanced IPPF, affording the opportunity to quickly present guidance on topical issues.

With a set of proposed enhancements to the IPPF now before us, we need another set of fresh eyes. It's time for feedback from you, and from key stakeholders. An exposure draft of the IPPF "relook" is now posted online here. It outlines the task force's recommendations and seeks evaluation and comments on each. The deadline for responses is Nov. 3.

Changes to our professional guidance must be considered carefully by internal auditors from around the world, from organizations large and small, and from an array of industries. That's because our guidance is intended for use everywhere internal auditing is practiced. And that's why we also need to consider the perspectives and opinions of our diverse stakeholder groups — the boards and audit committees, the regulators, the external auditors and other assurance providers, and the management teams who rely upon our work.

I believe that the IPPF, as it exists today, has served the profession well. But ours is a relatively young profession, and we meet new challenges every day. Our stakeholders have changing needs, and our professional guidance must evolve. Your insight can only help us to ensure the framework is appropriately flexible, complete, and positioned to meet what lies ahead. I look forward to your thoughts here and in the survey attached to the exposure draft.

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