Principles show internal audit value

3 May 17

Internal audit standards have been updated to include 10 core principles that can be used to demonstrate effectiveness and value

Internal audit standards have been updated to include 10 core principles that can be used to demonstrate effectiveness and value



It’s easy to assume that the Public Sector Internal Audit Standards (PSIAS) are “aspirational”. However, changes to the PSIAS have been put in place in the past year to make it easier for practitioners to apply the standards to everyday working processes.

Last spring, the PSIAS were amended to incorporate a new mission of internal auditing as well as 10 core principles for professional practice. The principles articulate internal audit effectiveness and can be used for training and to communicate the value of internal audit to managers and the audit committee. The principles dictate the audit:

  • Demonstrates integrity
  • Demonstrates competence and due professional care
  • Is objective and free from undue influence (independent)
  • Aligns with strategies, objectives and risks of the organisation
  • Is appropriately positioned and adequately resourced
  • Demonstrates quality and continuous improvement
  • Communicates effectively
  • Provides risk-based assurance
  • Is insightful, proactive and future focused
  • Promotes organisational improvement. 

Auditors should find integrating some of the principles into everyday work straightforward. For example, “communicates effectively” can be evidenced in every conversation between auditors and clients and every audit report or brief written. Others require a little more thought and CIPFA workshops last October considered how they could be integrated and evidenced.

Three principles in particular may need greater consideration: aligns with the strategies, objectives and risks of the organisation; is insightful, proactive and future focused; and promotes organisational improvement.

Encouraging auditors to think laterally, share ideas, read widely, network and learn from elsewhere will enable them to add value and insight to reports. Incorporating longer-term issues and responses to these will help them embed the principles and ensure internal audit is seen as a valuable resource and improvement partner.

Further revisions have been made to the PSIAS, which came into force on 1 April. These include new and amended standards, following changes put through the Global Institute of Internal Auditors’ International Standards at the start of 2017, and alterations to the public sector requirements and interpretations that make the PSIAS applicable to UK public sector organisations.

Most noteworthy among the revisions is the new Standard 1112 – Chief Audit Executive Roles Beyond Internal Auditing. For the first time, the standards recognise that heads of internal audit may have roles and responsibilities other than internal audit. While the new standard and the public sector interpretation acknowledge this, the standard’s focus is on safeguards to limit any impairment to independence that might arise. The public sector interpretation states that safeguards must be approved and periodically reviewed by the board (usually the audit committee).

The additional amendments are intended to make the standards and other elements of the PSIAS as practical as possible, while still setting the bar at a high level of quality.

Heads of internal audit in the UK public sector must ensure their teams and those charged with governance are aware of the changes and fully implement the new and revised standards. They should also brief audit committees and boards on the standards and update the internal audit charter to reflect new requirements. This provides an excellent opportunity for heads to set out how the internal audit team supports an organisation and its objectives. 

Public Sector Internal Audit Standards: 
CIPFA Internal Audit Conference:
CIPFA Better Governance Forum:

Keeley Lund is technical manager, Standards Faculty, CIPFA

Did you enjoy this article?