Consequent to the Institute of Internal Auditors’ (IIA) release of the new Global Internal Audit Standards (GIAS), KPMG has published its guidance document on how internal audit functions (IAFs) should implement the new Standards. 

 

The refreshed GIAS were released earlier this year on January 9, 2024 and are the outcome of a multiyear project led by the IIA, while taking into account the internal audit community’s efforts.

 

According to the IIA, GIAS guide the worldwide professional practice of internal auditing and serve as a basis for evaluating and elevating the quality of IAFs. These Standards are organised into 5 domains, and they draw from 15 guiding principles that facilitate effective internal auditing. The Standards outline the requirements, considerations for implementation, and examples of evidence of conformance. 

 

Major changes

The 2024 Standards build on the 2017 Standards and intend to do three things: (i) simplify the structure; (ii) ensure they are practical and address current and emerging topics; and (iii) enhance internal audit performance. KPMG’s analysts compared the 2024 Standards to the 2017 Standards and found that the wording in the new Standards indicate what IAFs ‘must do’, ‘should do’ or ‘may do’. The analysis also highlighted five major changes that any audit function must consider in addition to the changes related to the internal audit strategy and the requirements on performance management. 

 

The KPMG publication underlines that Internal Audit (IA) must formally establish a strategy for the audit function that is aimed at guiding the IA to fulfil the internal audit mandate. Furthermore, it highlights a second major change in the Standards, i.e., performance management, illustrating how effective performance management is viewed by the IIA and what a Chief Audit Executive must do to achieve it.

 

Ali Abbas, Director — Risk Consulting and Head of Internal Audit, Risk & Compliance Services, KPMG in Kuwait, said: “The updated Standards are anticipated to act as tailwinds to take forward discussions with boards on audit functions’ role in the future. This is considering that the added requirement on establishing an internal audit strategy calls for a meaningful dialog with the Board and Senior Management to identify how an IAF supports an organisation’s strategic objectives and its success, and how it aligns with key stakeholder expectations. It is our belief that the new Standards will act as great tools to look ahead and help us determine the kind of impact audit functions of the future can drive.”

 

Standards gap assessments

Having helped IAFs perform Standards gap assessments, developed internal audit strategies, and supported in their implementation, KPMG professionals thoroughly understand what goes into being in conformance and, at the same time, maximising stakeholder value. 

 

In closing, with the new Standards set to become effective from January 9, 2025, it is critical that IAFs incorporate these changes over the next few months. This means that organisations must consider assessing if they are in conformance with the IIA Standards, if their internal audit strategy is developed based on the right pillars, and if there are any gaps related to the IIA Standards that need bridging.--TradeArabia News Service