The Importance Of Internal Auditor

9594 Words39 Pages
1. Introduction The importance of internal audit has certainly raised up along with the transforming business environment. Nowadays internal audit standards and theories have been actively discussed, yet there are still many debates on the ambiguity of internal audit professions’ foothold and their duties. Moreover, the internal audit scandals have never been out of sight: FIFA (2015), Toshiba (2015), Libor (2012), Olympus (2012). Practitioners and scholars study the audit methods, the effectiveness, the factors, etc. that impact the internal audit, but it is only useful once the outputs of internal auditors are realised to outcome. The Greek philosopher Heraclitus (513BC) enounced “There is nothing permanent except change”. The concept of…show more content…
Concerning IA’s role to protect the organization, Basel (2012) and UK Committee on internal audit guidance for financial services (CIIA, 2013) hold two opposite opinions. When matching the concluded characters of IA from different definitions, IIA provides the most exhaustive definition, which has not been changed since 2001. Thus, in this part the normative internal audit concepts will be drawn from the IIA standards and…show more content…
21-22) standards defines “independence” as “The freedom from conditions that threaten the ability of the internal audit activity to carry out internal audit responsibilities in an unbiased manner” and gives the definition of “objectivity” as “An unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they believe in their work product and that no quality compromises are made. Objectivity requires that internal auditors do not subordinate their judgment on audit matters to others.” Yet independence and objectivity refer to different objects. The IIA (2012, p. 4) Standards also require audit independence at organizational level which means “chief audit executive (CAE) must report to a level within the organization that allows the internal audit activity to fulfill its responsibilities and objectivity for individual internal auditors”. It stipulates audit objectivity on an individual level, “Internal auditors must have an impartial, unbiased attitude and avoid any conflict of interest”(IIA, 2012, p. 4). The Code of Ethics (IIA, 2009, p. 1) also consists of principles restricting internal auditors as well as roles of conducts depicting norms of internal auditor behaviors. There is one principle for objectivity: “Internal auditors exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors make
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