6 Reasons Why You Need An Internal Audit Manual
The chief audit executive (CAE) must establish policies and procedures to guide the internal audit activity.
- An IAM should include the policy on individual objectivity that describes the expectations and requirements for an unbiased mindset for every internal auditor. To be more effective such a policy would describe:
- The critical importance of objectivity to the internal audit profession;
- Various situations/ scenarios/ factors that could undermine objectivity, such as auditing a family member or a close friend, etc.;
- Exact actions the internal auditor should take if he or she becomes aware of a current or potential objectivity concern;
- Reporting requirements, where each internal auditor periodically considers and discloses conflicts of interest.
At a minimum, an IAM should include the following internal policies:
- Independence and objectivity;
- Reliance on other assurance providers;
- Protecting confidential information;
- Audit records retention.
An IAM should include procedures for annual planning (including annual risk assessment, development of audit universe, used methodologies and tools), as well as procedures at the engagement level: for planning, fieldwork, reporting, and follow-up phases. Documentation requirements for working papers should also be clearly stated.