Applying The Global Internal Audit Standards - AIS

Applying the
Global Internal Audit Standards

THE INSTITUTE OF INTERNAL AUDITORS INDONESIA
PRESENTED AT FORUM PENGUATAN GRC OTORITAS JASA KEUANGAN
Agenda
• From Proposed Standards to Issued: IPPF Project Update,
Overview of Governance and Standards-setting Process.
• Overview of Updated Global Internal Audit Standards.
• Applying the Global Internal Audit Standards in the Public
Sector.
• Our Recommendations.
• What’s Next.
IPPF Project Update,
Overview of Governance and
Standard-setting Process
IPPF Governance Process
IIA Global Board of Directors

strategically direct and govern
Stakeholder Groups
provide knowledge, feedback, & input
IPPF Oversight Council

advise and oversee
Affiliates and Chapters
IIA Global HQ
Staff IIA Member Volunteers
(Knowledge Groups)
International Internal Audit coordinate, manage,
Global Guidance Council market, and maintain
Standards Board
develop, direct, and approve Standards
develop, direct, and approve Guidance projects Direct Stakeholders
(IIA members and other in
the internal audit profession)
Indirect Stakeholders
GB Authorization (Public, non-IA Profession)
IPPFOC Independent Oversight
Project Management
©2024, The Institute of Internal Auditors. All rights reserved. For individual personal use only.
International Internal Audit Standards Board (IIASB)
• Mission: To serve the

public interest by
developing, issuing,
maintaining, and
promoting the
International
Standards for the
Professional Practice
of Internal Auditing
on a worldwide basis.
• Representing the
internal audit
profession globally
with 21 members
from 18 countries and
various industries and
sectors.
IPPF Oversight Council
• Mission: To evaluate the due process for setting

standards and guidance to promote inclusiveness and
transparency, which ultimately serves the public
interest and increases stakeholder confidence in The
IIA’s Standards.
Organizations represented:
Publication:
Framework for Setting Internal Audit
Standards in the Public Interest
IPPF Evolution Timeline with Resources
Now Q2-Q4 Q1-Q2
Available 2024 2025
• Global Internal Audit StandardsTM basic PDF. • Tool: for CAE communication with board • New Standards become effective
• Condensed version of the Global Internal Audit Standards. and senior management about Domain III. Jan 9, 2025.
• Report on the Standard-setting and Public Comment • Conformance Assessment Readiness Tool • Updated Internal Audit
Processes for the Global Internal Audit Standards. Practitioner exam: no changes
• Refreshed and New Global Guidance before effective date.
• 2-Way Standards and Glossary Mapping. (Global Practice Guides, Global Technology
• Updated Learning Library (2 new courses). Audit Guides). • CIA® exam and study materials:
• Internal Auditor magazine special issue. no changes before May 2025.
• Topical Requirement on Cybersecurity –
iia.mydigitalpublication.com/february-2024. issued for public comment (Apr), followed • New Topical Requirements –
• Standards Knowledge Center: by release (Q4). issued for public comment,
Tools, courses, events, webinars, podcasts, and articles. • Global Internal Audit Standards (The followed by release.
─ Tool: Model Internal Audit Charter (General and Public Redbook) hardcover book (Q3, June).
Sector).
• New GTAG & Practice Guide.
• Global Internal Audit Standards digitally enhanced e-book.
• Translated Standards (including in Bahasa Indonesia).
Resources: Available at www.theiia.org
New IPPF and
Global Internal Audit Standards –
Structure
The IPPF Evolution
2017 2024
The New Structure
5 Domains
15 Principles
• 52 Standards
• Requirements
• Considerations for Implementation
• Examples of Evidence of Conformance
Additional features:
• Fundamentals
• Applying the Standards in the Public Sector
• Glossary
Global Internal Audit Standards
5 Domains, 15 Principles
Domain I: Purpose of Internal Auditing
II. Ethics and Professionalism

1. Demonstrate 2. Maintain 3. Demonstrate 4. Exercise Due 5. Maintain
Integrity Objectivity Competency Professional Care Confidentiality
III. Governing the Internal Audit IV. Managing the Internal Audit V. Performing Internal Audit
Function Function Services
6. Authorized by the Board 9. Plan Strategically 13. Plan Engagements Effectively

10. Manage Resources
7. Positioned Independently 14. Conduct Engagement Work
11. Communicate Effectively
15. Communicate Engagement
8. Overseen by the Board Conclusions and Monitor Action
12. Enhance Quality Plans
Global Internal Audit Standards –
Glossary & Fundamentals
Glossary
Old Term or Concept Updated Term New to the Glossary
consulting services advisory services Assurance engagement Internal audit public sector risk tolerance
supervisor charter
engagement opinion engagement
conclusion
competency finding internal audit residual risk root cause
internal audit activity internal audit manual
function
purpose, authority, responsibility internal audit
mandate condition impact internal audit results of senior
plan internal audit management
policies and procedures (internal methodologies services
audit)
Existing Terms With New Definitions criteria inherent risk likelihood risk and stakeholder
control
board
matrix
control processes
engagement integrity may risk workpapers
fraud planning assessment
internal auditing
risk appetite *Not a comprehensive list.
Board - Definition
Highest-level body charged with governance, such as:
• A board of directors.
• An audit committee.
• A board of governors or trustees.
• A group of elected officials or political appointees.
• Another body that has authority over the relevant governance functions.
In an organization that has more than one governing body, “board” refers to the body or bodies
authorized to provide the internal audit function with the appropriate authority, role, and
responsibilities.
If none of the above exists, “board” should be read as referring to the group or person that acts
as the organization’s highest-level governing body. Examples include the head of the organization
and senior management.
Fundamentals of the Global Internal Audit Standards
Elevated Introduction highlights 4 main sections:
• Internal Auditing and the Public Interest.

• Demonstrating Conformance with the Standards.
• Application in Small Internal Audit Functions.
• Application in the Public Sector.
Fundamentals of the Global Internal Audit Standards
Demonstrating Conformance with the Standards

• Conformance is expected but may not always be possible to
achieve.
• Examples of circumstances limiting conformance are often related
to insufficient resources or specific aspects of a sector, industry,
and/or jurisdiction.
• Implement alternative actions to achieve intent of related standard
when possible.
• Documentation and communication of nonconformance is
required.
Small Internal Audit Functions
The Introduction will recognize the challenges Small Internal Audit

Functions may face in conforming with the Global Internal Audit
Standards:
• Internal audit functions must determine for themselves if they are ‘small.’
• Small may be dependent on the size of the organization or the size of the
internal audit function itself.
• The most significant impacts are likely to be resources and the ability to
meet all the requirements (such as supervision).
• Single person functions may be especially challenged to adequately
implement a Quality Assurance Improvement Program.
Global Internal Audit Standards:
Domains
Domain I: Purpose of Internal Auditing
Purpose Statement:
Internal auditing strengthens the organization’s ability to create, protect, and sustain value by providing
the board and management with independent, risk-based, and objective assurance, advice, insight, and foresight.
Internal auditing enhances the organization’s: Internal auditing is most effective when:
• Successful achievement of its objectives. • It is performed by competent professionals in
conformance with the Global Internal Audit
• Governance, risk management, and control
Standards, which are set in the public interest.
processes.
• The internal audit function is independently
• Decision-making and oversight.
positioned with direct accountability to the
• Reputation and credibility with its stakeholders. board.
• Ability to serve the public interest. • Internal auditors are free from undue influence
and committed to making objective assessments.
Domain II: Ethics and Professionalism
Internal auditors Internal auditors Internal auditors apply Internal auditors apply Internal auditors use
demonstrate integrity in maintain an impartial the knowledge, skills, due professional care in and protect information
their work and behavior. and unbiased attitude and abilities to fulfill planning and performing appropriately.
when performing their roles and internal audit services.
internal audit services responsibilities
and making decisions. successfully.
1.1 Honesty and 4.1 Conformance
2.1 Individual 5.1 Use of
Professional 3.1 Competency with Global Internal
Objectivity Information
Courage Audit Standards
3.2 Continuing
1.2 Organization’s 2.2 Safeguarding 4.2 Due 5.2 Protection of
Professional
Ethical Expectations Objectivity Professional Care Information
Development
2.3 Disclosing
1.3 Legal and 4.3 Professional
Impairments to
Ethical Behavior Skepticism
Objectivity
Domain III: Governing the Internal Audit Function
Domain III standards include “essential conditions” for an effective internal audit function.
6. Authorized by the Board 7. Positioned Independently 8. Overseen by the Board

The board establishes, approves, and The board establishes and protects The board oversees the internal audit
supports the mandate of the internal the internal audit function’s function to ensure the function’s
audit function. independence and qualifications. effectiveness.
6.1 Internal Audit Mandate 8.1 Board Interaction

7.1 Organizational Independence
8.2 Resources
7.2 Chief Audit Executive
6.2 Internal Audit Charter Qualifications
8.3 Quality
6.3 Board and Senior

Management Support 8.4 External Quality Assessment
Domain IV: Managing the Internal Audit Function
9. Plan Strategically 10. Manage Resources 11. Communicate 12. Enhance Quality
The chief audit executive plans The chief audit executive Effectively The chief audit executive is
strategically to position the manages resources to The chief audit executive guides responsible for the internal
internal audit function to fulfill its implement the internal audit the internal audit function to audit function’s conformance
mandate and achieve long-term function’s strategy and achieve communicate effectively with its with the Global Internal Audit
success. its plan and mandate. stakeholders. Standards and continuous
performance improvement.
9.1 Understanding Governance,
Risk Management, and 10.1 Financial Resource 11.1 Building Relationships and
Management Communicating with Stakeholders
Control Processes 12.1 Internal Quality Assessment
10.2 Human Resource

9.2 Internal Audit Strategy Management 11.2 Effective Communication
12.2 Performance Measurement
9.3 Methodologies 10.3 Technological Resources 11.3 Communicating Results 12.3 Oversee and Improve
Engagement Performance
9.4 Internal Audit Plan 11.4 Errors and Omissions
9.5 Coordination and Reliance 11.5 Communicating the

Acceptance of Risks
Domain V: Performing Internal Audit Services
13. Plan Engagements Effectively 14. Conduct Engagement Work 15. Communicate Engagement
Internal auditors plan each engagement Internal auditors implement the engagement Conclusions and Monitor Actions
using a systematic, disciplined approach. work program to achieve the engagement Plans
objectives.
Internal auditors communicate the
13.1 Engagement Communication engagement results to the appropriate
14.1 Gathering Information for Analyses parties and monitor management’s
and Evaluation progress toward implementation of
13.2 Engagement Risk Assessment 14.2 Analyses and Potential Engagement recommendations or action plans.
Findings
13.3 Engagement Objectives and Scope 15.1 Final Engagement Communication
14.3 Evaluation of Findings
13.4 Evaluation Criteria

14.4 Recommendations and Action Plans 15.2 Confirming the Implementation of
Action Plans
13.5 Engagement Resources 14.5 Developing Engagement Conclusions
13.6 Work Program 14.6 Documenting Engagements
Applying the Global Internal Audit
Standards in the Public Sector
Domain I. Purpose of Internal Auditing
Purpose Statement:
Internal auditing strengthens the organization’s ability to create, protect, and sustain value by providing
the board and management with independent, risk-based, and objective assurance, advice, insight, and
foresight.
Internal auditing enhances the Internal auditing is most effective when:
organization’s: • It is performed by qualified internal auditors in
• Successful achievement of its objectives. conformance with the Global Internal Audit
Standards, which are set in the public interest.
• Governance, risk management, and control
processes. • The internal audit function is independently
positioned with direct accountability to the
• Decision-making and oversight. board.
• Reputation and credibility with its • Internal auditors are free from undue influence
stakeholders. and committed to making objective
• Ability to serve the public interest. assessments.
Domain II: Ethics and Professionalism
Internal auditors Internal auditors Internal auditors apply Internal auditors apply Internal auditors use
demonstrate integrity in maintain an impartial the knowledge, skills, due professional care in and protect information
their work and behavior. and unbiased attitude and abilities to fulfill planning and performing appropriately.
when performing their roles and internal audit services.
internal audit services responsibilities
and making decisions. successfully.
1.1 Honesty and 4.1 Conformance
2.1 Individual 5.1 Use of
Professional 3.1 Competency with Global Internal
Objectivity Information
Courage Audit Standards
3.2 Continuing
1.2 Organization’s 2.2 Safeguarding 4.2 Due 5.2 Protection of
Professional
Ethical Expectations Objectivity Professional Care Information
Development
2.3 Disclosing
1.3 Legal and 4.3 Professional
Impairments to
Ethical Behavior Skepticism
Objectivity
Domain III: Governing the Internal Audit Function
Domain III standards include “essential conditions” for an effective internal audit function.
6. Authorized by the Board 7. Positioned Independently 8. Overseen by the Board

The board establishes, approves, and The board establishes and protects The board oversees the internal audit
supports the mandate of the internal the internal audit function’s function to ensure the function’s
audit function. independence and qualifications. effectiveness.
6.1 Internal Audit Mandate 8.1 Board Interaction

7.1 Organizational Independence
8.2 Resources
7.2 Chief Audit Executive
6.2 Internal Audit Charter Qualifications
8.3 Quality
6.3 Board and Senior

Management Support 8.4 External Quality Assessment
Domain IV. Managing the Internal Audit Function
9. Plan Strategically 10. Manage Resources 11. Communicate 12. Enhance Quality
The chief audit executive plans The chief audit executive Effectively The chief audit executive is
strategically to position the manages resources to The chief audit executive guides responsible for the internal
internal audit function to fulfill its implement the internal audit the internal audit function to audit function’s conformance
mandate and achieve long-term function’s strategy and achieve communicate effectively with its with the Global Internal Audit
success. its plan and mandate. stakeholders. Standards and continuous
performance improvement.
9.1 Understanding Governance,
Risk Management, and 10.1 Financial Resource 11.1 Building Relationships and
Management Communicating with Stakeholders
Control Processes 12.1 Internal Quality Assessment
10.2 Human Resource

9.2 Internal Audit Strategy Management 11.2 Effective Communication
12.2 Performance Measurement
9.3 Methodologies 10.3 Technological Resources 11.3 Communicating Results 12.3 Oversee and Improve
Engagement Performance
9.4 Internal Audit Plan 11.4 Errors and Omissions
9.5 Coordination and Reliance 11.5 Communicating the

Acceptance of Risks
Domain V. Performing Internal Audit Services
No distinction between Assurance and Advisory engagements
13. Plan Engagements Effectively 14. Conduct Engagement Work 15. Communicate Engagement
Internal auditors plan each engagement Internal auditors implement the engagement Conclusions and Monitor Actions
using a systematic, disciplined approach. work program to achieve the engagement Plans
objectives.
Internal auditors communicate the
13.1 Engagement Communication 14.1 Gathering Information for Analyses engagement results to the appropriate
and Evaluation parties and monitor management’s
progress toward implementation of
13.2 Engagement Risk Assessment 14.2 Analyses and Potential Engagement recommendations or action plans.
Findings
13.3 Engagement Objectives and Scope 15.1 Final Engagement Communication
14.3 Evaluation of Findings
13.4 Evaluation Criteria

14.4 Recommendations and Action Plans 15.2 Confirming the Implementation of
Action Plans
13.5 Engagement Resources 14.5 Developing Engagement Conclusions
13.6 Work Program 14.6 Documenting Engagements
Unique Aspects of Auditing in the Public Sector
• Accountability in Public
Funding.
• Nature of Politics.
• Governance.
• Public Good/Public Interest.
• Transparency, Ethics and
Integrity.
• Legal, Regulatory, and Fiscal
Compliance.
• Efficiency, Effectiveness, and
Equity in Public Service
Delivery.
Our Recommendations
IIA Indonesia Recommends
Refresh understanding on Align actions and priorities

organization values and to the organization's
Update the IA Charter to
Familiarize with the new assess what value can Obtain feedback from key vision, strategy, and
incorporate the new ethics
Standards Internal Audit provides to stakeholders governance model and
and professionalism
the organizations in update the IA Strategic
relation to GRC Plan
Perform an IA Readiness
Create plans to develop Develop Quality
Assessment to identify
Assess Chief Audit coordination and Assurance and
Enforce ethics what needs to change to
qualifications collaboration with the first Improvement Programme
conform with the new
and second line (QAIP)
Standards.
Develop IA strategic Reflect these changes in Socialize [new] IA

Refresh your IA training
plans: GRC-based plan, Develop IA performance your IA policies, reporting and
and development
IA strategy, restructuring measurements. procedures, and communications approach
programme
audit methodology. templates to all IA stakeholders
Keys to Successful Implementation of the Global Internal
Audit Standards
1. Align with key stakeholders.
2. Get and develop the right resources.
3. Continue to improve.
4. Deliver value.
5. Manage internal audit strategically.
6. Proactively assess your organization’s risk management and governance
processes.
7. Strive for excellence (performance + conformance).
What’s Next
What’s Next?
• Implement!
• Topical
Requirements.
• Quality Assessments.
• Certifications.
• Additional Resources.
• To Learn More
www.theiia.org/New
Standards
Keep up with the latest!

theiia.org/IPPFEvolution
Topical Requirements
A Topical Requirement Is: Why Topical Requirements?
• Required when an internal auditor is performing an • Strengthen the ongoing relevance of the IPPF by
assurance engagement on a topic/risk area for which a addressing pervasive and evolving risks.
Topical Requirement exists. • Ensure consistency and quality of engagement
• Subject to applicability as determined by risk-based internal performance.
audit plan. Limitations must be documented.
• A baseline for engagement performance when the topic/risk area is How?
subject to review.
• Development by experts and internal audit leaders
• Covers aspects of governance, risk management, and control representing various sectors and industries globally.
processes.
• Broad proactive stakeholder outreach and feedback
• Subject to external quality assessment. collected through a public comment period.
• Ongoing oversight of due process by IPPF Oversight
A Topical Requirements Is Not: Council, an independent body comprising
• A requirement to perform an engagement on the topic. representatives of global organizations.
• A comprehensive work program.
• Designed to address emerging topics.
External Quality Assessments
Options for Planning EQAs
Based on the January 2024 issuance of the Global Internal Audit Standards and the effective
date of January 2025.
If the EQA is due in 2024:

2024
• The quality assessment should be conducted as scheduled in conformance with the
current IPPF.
• A gap assessment should be considered in 2024 in addition to the current EQA to
prepare for the transition.
2025 or If the EQA is due in 2025 or beyond:

beyond
• The quality assessment can be accelerated into 2024 to allow for the assessment to be
conducted in conformance with the current IPPF.
• A readiness assessment can be conducted in 2024 to identify any gaps for the
implementation of the Global Internal Audit Standards.
Changes to Examinations for IIA Credentials
Exam
• No changes before May 2025. • No changes before effective
date.
Transition period
• Now available. Scan QR code for details.
• Not affected; remains the

same.
Upcoming IIA Happenings
Professional Auditor Forum WORKSHOP 2024 ACIIA REGIONAL WORKSHOP

CONFERENCE
Effective Data-Driven, Navigating The Global Impactful
Board-Ready Audit Internal Audit Standards IIA INDONESIA is hosting Communication
the 2024 Asia Pacific Skill
Management, in
13 – 14 June 2024 regional conference
cooperation with Diligent
Tentrem Hotel, Semarang 30 August 2024
28 – 29 August 2024 Bali Nusa Dua
12 June 2024, 09:00 – 12:00
Bali Nusa Dua Convention Convention Centre
Le Meridien Ballroom, Jakarta
Centre
FREE for members
https://iia-indonesia.org/paf-12jun24/ https://iia-indonesia.org/workshop- https://aciia.iia-indonesia.org/ https://aciia.iia-indonesia.org/

navigation-global-ia-standards-13jun24/
Q&A
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Applying the

Global Internal Audit Standards

IIA Global Board of Directors

IPPF Oversight Council

• Mission: To serve the

• Mission: To evaluate the due process for setting

II. Ethics and Professionalism

6. Authorized by the Board 9. Plan Strategically 13. Plan Engagements Effectively

Elevated Introduction highlights 4 main sections:

• Internal Auditing and the Public Interest.

Demonstrating Conformance with the Standards

The Introduction will recognize the challenges Small Internal Audit

6. Authorized by the Board 7. Positioned Independently 8. Overseen by the Board

6.1 Internal Audit Mandate 8.1 Board Interaction

6.3 Board and Senior

10.2 Human Resource

9.4 Internal Audit Plan 11.4 Errors and Omissions

9.5 Coordination and Reliance 11.5 Communicating the

13.4 Evaluation Criteria

13.6 Work Program 14.6 Documenting Engagements

6. Authorized by the Board 7. Positioned Independently 8. Overseen by the Board

6.1 Internal Audit Mandate 8.1 Board Interaction

6.3 Board and Senior

10.2 Human Resource

9.4 Internal Audit Plan 11.4 Errors and Omissions

9.5 Coordination and Reliance 11.5 Communicating the

13.4 Evaluation Criteria

13.6 Work Program 14.6 Documenting Engagements

Refresh understanding on Align actions and priorities

Develop IA strategic Reflect these changes in Socialize [new] IA

Keep up with the latest!

If the EQA is due in 2024:

2025 or If the EQA is due in 2025 or beyond:

• Not affected; remains the

Professional Auditor Forum WORKSHOP 2024 ACIIA REGIONAL WORKSHOP

https://iia-indonesia.org/paf-12jun24/ https://iia-indonesia.org/workshop- https://aciia.iia-indonesia.org/ https://aciia.iia-indonesia.org/

No part of the materials including branding, graphics, or logos, available in

For more information, please read our statement concerning copying,

Elevating the Standards.

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