Notes on Updates in Internal Auditing Principles - Class Overview

Updates in Internal Auditing Principles

Course Information

  • Course Title: IAPrElec 01 - Updates in Internal Auditing Principles

  • Semester: 2nd Semester, Academic Year 2025 - 2026

  • Schedule: Tuesday, 1:00 p.m. - 4:00 p.m.

  • Instructor: Lyka V. Lagunsin

Classroom Rules

  1. Patience

  2. No cheating

  3. Discipline

  4. Strictly follow instructions

Grading System

  • Attendance: 5%

  • Quiz: Pre-test: 20%

  • Quiz: Post-test: 20%

  • Term Exam: 33%

  • Board work/Recitation/Report: 22%

  • Total: 100%

Prelim Exam

  • Types:

    • Modified True or False

    • Essay Writing

Key Institutions and Standards

  • International Internal Audit Standards Board (IASB):

    • A global body of volunteers dedicated to establishing and maintaining standards for the public's interest in internal auditing.

  • Global Internal Audit Standards (GIAS) - 2024:

    • Guide global practices in internal auditing and a basis for evaluating audit quality.

    • Purpose: Serve as a foundation for judging the quality and effectiveness of internal audit procedures.

  • Internal Auditors: Professionals operating within a specific entity.

Five Domains of Internal Auditing

  1. D1: Purpose of Internal Auditing

  2. D2: Ethics and Professionalism

  3. D3: Governing the Internal Audit Function

  4. D4: Managing the Internal Audit Function

  5. D5: Performing Internal Audit Services

  • Institute of Internal Auditors (IIA):

    • Supports the profession with resources and development aimed at mitigating risks and enhancing organizational impact.

Importance of Acronyms

  • The instructor emphasizes the need to memorize acronyms linked to the course content.

Course Content Overview

  • Acknowledgements

  • About the International Professional Practices Framework (IPPF)

    • Framework: Structural blueprint aiding the development and application of internal audit knowledge.

    • Components of IPPF: Includes GIAS, Topical Requirements, Global Guidance.

    • Governs: Standards for current practices.

    • Mandatory Elements: Set of governing principles for effective internal auditing.

    • Topical Requirements: Enhances consistency in providing audit services on specific subjects.

    • Global Guidance: Supports standards with best practices in internal auditing.

Domains of Internal Auditing

Domain I: Purpose of Internal Auditing

  • Purpose Statement:

    • Strengthens organizational value, governance, risk management, and stakeholder reputation.

Domain II: Ethics and Professionalism

  • Principles:

    • 1: Demonstrate Integrity

    • 2: Maintain Objectivity

    • 3: Demonstrate Competency

    • 4: Exercise Due Professional Care

    • 5: Maintain Confidentiality

Principle 1: Demonstrate Integrity

  • Definition: Adherence to moral principles and the courage to act truthfully even when faced with challenges.

    • Standard 1.1: Honesty and Professional Courage

    • Requirements:

    • Truthfulness and transparency in communication.

    • Reporting all known facts affecting organizational decisions.

    • Implementation Considerations:

    • Ethical training opportunities and mentorship should be provided to enhance decision-making under pressure.

Standard 1.2: Organization's Ethical Expectations

  • Requirements:

    • Internal auditors must understand and align with the organization's ethical expectations.

  • Implementation Considerations:

    • Regular assessments of the organization's ethical culture and reporting any discrepancies.

Standard 1.3: Legal and Ethical Behavior

  • Requirements:

    • Must not engage in or support illegal or discreditable actions.

    • Must comply with relevant laws and disclose violations to appropriate channels.

Glossary of Key Terms

  • Activity under review: The specific subject of an internal audit engagement.

  • Advisory services: Services without assurance responsibilities, offering advice to stakeholders.

  • Assurance services: Objective assessments providing assurance.

  • Authority: Organizational bodies responsible for governance.

  • Competency: Knowledge, skills, abilities required for the auditor’s job.

  • Conflict of interest: Situations where personal interests may influence professional judgments.

  • Due professional care: The diligence expected of auditors ensuring quality outcomes.

Conclusion and Ongoing Development

  • Internal auditors are required to maintain skills relevant to their responsibilities through continuing professional development and adherence to quality standards.

  • The chief audit executive is responsible for overseeing training, development opportunities, and ensuring all personnel conform to established standards.

Performance and Quality Assessment

  • Internal auditing is not just about compliance but enhancing the value and quality of the organization’s governance processes through assurance and advisory services.