Diana Melville, CIPFA Governance Advisor
CIPFA is currently consulting on a public sector application note that accompanies new internal audit standards. The Global Internal Audit Standards (GIAS) were issued earlier this year but before these can be applied in the UK public sector, a thorough review was needed. CIPFA, working with the other UK public sector standard setters, has now concluded that review.
The application note eases the implementation of the GIAS by addressing areas where interpretation or adjustments are required. Aspects included are resourcing, the qualifications of the chief audit executive, and the importance of value for money in the planning of audit engagements.
Supporting the governance of internal audit
CIPFA is also consulting on a Code of Practice for the Governance of Internal Audit in Local Government. This is open until 28 November. To support the implementation of the GIAS and the application note, the Code addresses the responsibilities of senior management and the audit committee towards internal audit. CIPFA already provides guidance on these areas through the Statement on the Role of the Head of Internal Audit and the Position Statement on Audit Committees and the supporting publication. The Code brings these together to support the new standards Ensuring that internal audit has the necessary authority, support and oversight of the organization is important to achieving its overall conformance. These are also essential to get the best out of your internal audit function, to ensure it has a sustainable footing on which to plan and build, and to ensure it provides the assurance on what matters most.
The Code provides a route map for recommended practices in the GIAS that takes into account the governance of local government bodies. While the GIAS practices make sense for the governance of internal audit, inevitably a global standard that is meant to apply across all sectors cannot reflect the legislation and practices of UK local government bodies. The Code provides a common interpretation to support the implementation across the sector. It is part of CIPFA’s work to advocate for high-quality internal audit in the sector.
Next steps
Following the consultations, it is planned that the new standards for the public sector will apply from 1 April 2025. All public sector bodies in the UK will need to implement the GIAS together with the application note from that date. Until then the Public Sector Internal Audit Standards will apply. Local government bodies will also need to apply the Code from 1 April.
When internal audit teams undergo their external quality assessment, their assessor will make their conclusions using the GIAS, application note and the Code if they are in local government.
There is a free drop-in session on 5 November where you can ask any questions you might have about the Code or the standards generally.