New Directions on the Audit Trail
I often get asked for directions. Sometimes this is even when I’m on holiday myself. There is clearly something about me that gives tourists, and the more generally lost, confidence I can point them in the right direction. The ubiquity of online maps and smart phones doesn’t seem to have affected my popularity. Whether it’s the best way to Loch Ness or where a particular train carriage is on a platform in Paris’ Gare de Lyon, I have managed to get people on their way a surprisingly large number of times.
We do all need a bit of direction from time to time. Sometimes it’s when we’re hopelessly lost in unfamiliar surroundings; but other times it’s more about reassuring direction, confirming we are on the right track.
Earlier this year, the Institute of Internal Auditors published the Internal Audit Code of Practice aimed primarily at the private and third sectors. This provides similar direction, which is already in place for the public sector through the Public Sector Internal Audit Standards, and the Financial Services Sector through the Institute’s Guidance on Effective Internal Audit in Financial Services. While the Code will be familiar to organisations currently receiving internal audits, it assists both the client and the auditor in setting out best practice for these two sectors in language and using references relevant to them, providing reassuring direction and guidance.
With many Foundation Trusts having opted to set up subsidiary companies, numerous NHS functions are now operated through private companies; and the new Code of Practice provides useful direction for these subsidiaries and their internal auditors, building on the current IIA Standards. It is also timely given the collapse of Carillion in the Private Sector, and the Oxfam scandal in Haiti in the Third Sector.
The Code provides particular direction on the following areas:
- The role, mandate, and expected unrestricted access into the organisation by internal audit, along with setting out the independence and authority of Internal Audit;
- Internal audit coverage and planning;
- Audit reporting to relevant governing bodies; and
- Interaction with other assurance providers.
Good directions ultimately lead you to your chosen destination. Internal Audit is there to help an organisation on its chosen path in accomplishing its objectives. For the Private and Third sectors the new Internal Audit Code of Practice provides necessary clarification and direction on this journey. And for those looking for Loch Ness, follow the A82.