IIA Responds to Exposure Drafts
In its role as the internal audit profession’s chief advocate, the Institute of Internal Auditors (IIA) provides input on a variety of corporate governance and risk management issues around the world.
After surveying members and gaining insights from internal audit thought leaders, the IIA recently responded to several organizations seeking input on newly proposed guidance, revisions to existing guidance, or legislative mandates affecting the work of internal auditors.
In August 2011, the U.S. Public Company Accounting Oversight Board (PCAOB) exposed for comment a Concept Release on Auditor Independence and Audit Firm Rotation. The IIA responded in December by saying that mandatory firm rotation would impose several risks and recommended a variety of alternatives to ensure the effectiveness and quality of financial statement auditing. The IIA will appear in front of the PCAOB at a public meeting on March 22 to present its perspectives.
In related news, Jeanette Frenzel – an IIA member, Certified Internal Auditor, and recent member of The IIA’s International Internal Audit Standards Board – was appointed to the five-member PCAOB.
On February 29, the IIA provided comments to the Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants regarding their exposure draft of International Good Practice Guidance for Evaluating and Improving Internal Control in Organizations. The IIA’s comments focused on the competencies required to evaluate an organization’s internal control system holistically, and whether the draft guidance is comprehensive.
The IIA also recently responded to the well-known Basel Committee on Supervision. Basel’s recently released Consultative Document, “The Internal Audit Function in Banks” in an effort to replace a similar document from 2001. As the banking industry and internal audit profession have undergone significant changes in the past decade, the IIA applauded the update and made a number of recommendations to strengthen the guidance – including direct reference to The IIA’s Professional Practices Framework. The IIA’s comments were submitted on March 2.