Public sector internal audit standards ‘will ensure transparency’

15 Mar 13
The first internal audit standards to apply across the whole of the public sector will help ensure transparency and accountability at a time of spending cuts, CIPFA has said.

By Richard Johnstone | 18 March 2013

The first internal audit standards to apply across the whole of the public sector will help ensure transparency and accountability at a time of spending cuts, CIPFA has said.

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The unified standards, which will apply from April 1, also intend to ensure sound corporate governance at a time of public service reforms.

CIPFA worked with the Chartered Institute of Internal Auditors and the other internal audit standard setters in the public sector to devise the standards. These are the Treasury, the Department of Health, the Scottish Government, Welsh Government and the Department of Finance and Personnel Northern Ireland.

Internal auditors evaluate the management of risks faced by an organisation, including strategic and operational as well as financial, and provide accounting officers and audit committees with an independent report on their findings.

The PSIAS are based on existing International Standards for Internal Audit, but adapted for use in the public sector. They also provide a clearer basis for assessing the performance and development needs of internal audit teams.

Adoption of the agreed rules comes after the National Audit Office criticised the internal audit regime in central government, finding little consistency in the application of audit standards, and variation in quality.

Ian Peters, chief executive of the CIIA, said the standards would ensure that the spending of public money was fully held to account.   

‘This is particularly important at a time when the public sector is undergoing major restructuring as well as coping with tightening budgets. The new guidance points the way in building the capabilities of internal audit and harnessing its full value to help ensure effective corporate governance in the public sector.’

CIPFA chief executive Steve Freer added: ‘As the public sector adapts to sustained reductions in funding and continues to roll out major reform programmes over the coming years, effective internal audit is more crucial than ever in ensuring transparency and accountability in the management of risk and internal control.’

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