- Government Internal Audit Standards
- The Role of the Head of Internal Audit in Public Service Organisations
- Sample Internal Audit Charter
- Risk Management - Management of Risk - Principles and Concepts (The Orange Book)
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There have been significant advances since 2001 when the previous Government Internal Audit Standards were published. Governance, risk management and finance professionalism have all been transformed. Internal audit must be effective and credible if it is to play a key role in these new governance structures and in delivering valued services. The new Standards give more emphasis to the need for high level and effective engagement with boards, audit committees and accounting officers.
The new version of the Standards has been based on the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors, the global professional body. Additions to the International Standards have been included where specific requirements of interpretations have been needed for central government.
The Chartered Institute of Public Finance & Accountancy (CIPFA) have produced a statement on the role of the Head of Internal Audit (HIA) in public service organisations in order to help promote the key role of the HIA in relation to risk management, governance and assurance. The Statement sets out the five principles that define the core activities and behaviours that belong to the role of the HIA in public service organisations and the organisational arrangements needed to support them. Public service organisations can use the Statement as the framework to assess their existing arrangements and, where appropriate, develop plans to improve the quality of their internal audit service.
The Government Internal Audit Standards (GIAS) published by HM Treasury state that the purpose, authority and responsibility of the internal audit activity must be formally defined in an internal audit charter. The internal audit charter is a formal document that defines the internal audit activity's purpose, authority, and responsibility. The internal audit charter establishes the internal audit activity's position within the organisation; authorises access to records, personnel and physical properties relevant to the performance of engagements; and defines the scope of internal audit activities. The Internal Audit Charter must also cover the arrangements for the appointment of the Head of Internal Audit and internal audit staff, and identify the nature of professionalism, skills and experience required. Final approval of the internal audit charter resides with the board.
In 2001 Treasury produced Management of Risk – A Strategic Overview which provided a basic introduction to the concepts of risk management. This document was updated in 2004 with the publication of Management of Risk - Principles and Concepts (also known as The Orange Book). The Orange Book is not a detailed instruction manual for how to manage risk, but aims to provide an introduction to the range of considerations which apply in risk management, all of which can be applied at various levels ranging from the development of a strategic, organisation-wide risk policy through to management of a particular project or operation.
