ICAI Exposure Draft Framework governing Internal Audits
Internal audit provides independent assurance on effectiveness of internal controls, risk management processes and contributes to enhancing governance for achieving organizational objectives.
The Internal Audit Standards Board of The Institute of Chartered Accountants of India (ICAI) has invited comments on the proposed Framework Governing Internal Audits
The stated objective of the draft framework is:
(i) To provide clarity on key components governing the overall internal audit process and how it’s conducted;
(ii) To ensure that internal audits are performed by deploying certain basic principles, aimed at ensuring high quality of outcome;
(iii) Providing a high degree of comfort to the auditee on the reliability of the assurance given; and
(iv) To provide high credibility to the internal audit reports and other communications issued by the auditor
The draft Framework governing Internal Audits has the following four key components, directed at establishing the credibility of the Internal Auditor and the manner in which the Internal Audit Process is executed:
(i) Code of Ethics;
(ii) Basic Principles governing an Internal Audit:
(iii) Internal Audit Charter; and
(iv) Compliance with IASB Pronouncements.
It has been proposed that in the first year of its implementation, the Framework will be mandatory only for internal audits conducted on Listed Companies, and thereafter, it will become mandatory for internal audits conducted on all companies subject to internal audit as per Companies Act, 2013.\