In the light of recent high profile corporate failures, the Chartered Institute of Internal Auditors (IIA) is calling for internal audit to be accountable to UK professional and regulatory requirements in the Financial Reporting Council’s (FRC’s) proposed revisions to the corporate governance code
In its response to the FRC consultation on the code revisions, the IIA suggest the new code explicitly requires regular monitoring and reviewing of the independence and objectivity of internal audit, and that relevant UK professional and regulatory requirements are taken into account.
Dr Ian Peters, IIA chief executive, said: ‘It is critical we have a corporate governance framework in place that reflects our current environment.
‘It has become clear that, in the context of very public corporate failures like Carillion, the role of internal audit needs to be scrutinised and held to the highest standards.’
Professional standards for internal auditors include the IIA’s global standards for internal auditors and the chartered IIA’s guidance on effective internal audit in the financial services sector, informally known as the financial services code.
‘Following the success of the financial services code, we will also be working this year on producing a code of practice for other sectors, which sets out the role, scope and priorities of internal audit,’ Peters said.
The IIA held seminars across the country and received feedback from the private sector (including many listed companies), as well as the public sector, to inform its submission to the FRC.
The IIA's response to the Proposed Revisions to the UK Corporate Governance Code consultation is here.
Report by Pat Sweet
