Singapore Government

IA Essentials #3

The International Standards for the Professional Practice of IA ("Standards") simply state that IA activity must be independent and that the Internal Auditors must be objective in performing their work.

In order to achieve independence, the Chief Audit Executive (CAE) must report to a level within the organisation that allows IA activity to operate independently. Independence is also emphasised in the Singapore Code of Corporate Governance (Code) Principle 13 “The Company should establish an effective IA function that is independent of the activities it audits.”

The Code Principle 12.5 also places responsibility on the Audit Committee to uphold this independence by indicating that the Audit Committee should meet with the Internal Auditors without the presence of Management, at least annually.

The Standards further highlight the need for independence by stating that the CAE must communicate and interact directly with the board. Any impairment to independence or objectivity of the Internal Auditor must be disclosed to appropriate parties.

To read about what circumstances would entail an impairment of independence, please refer to the Standards.

Click here to refer to the Standards

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