IA Charter
A charter provides the organization a blueprint for how internal audit will operate and helps the governing body to clearly signal the value it places on internal audit’s independence. Ideally it establishes reporting lines for the chief audit executive (CAE) that support that independence by reporting functionally to the governing body (or those charged with governance) and administratively to executive management. It also provides the activity the needed authority to achieve its tasks, e.g., unfettered access to records, personnel, and physical properties relevant to performing its work.
The charter can provide in great detail what work internal audit will undertake and the support it will receive from senior management and the governing body to achieve that work. Finally, the audit charter serves as a reference point to measure the effectiveness of the internal audit activity.
The IA Charter covers the following basic areas:
- Mission and purpose;
- Standards of Professional Practice of IA;
- Authority;
- Responsibility;
- Independence and Objectivity;
- Scope of IA Activities; and
- Quality Assurance and Improvement Program
IA Manual
The internal audit manual may contain guidance on how to assess the adequacy and effectiveness of controls. This should include manual controls as well as general IT controls and specific application controls. Detailed guidance on how to achieve this goal can be described in the manual.
The position of internal audit within the organization shall be clarified. It shall be made clear what the authority of internal audit is and what they are not responsible for. The reporting lines of internal audit, both administrative and functional, to senior management, the audit committee (if any) and the parliament eventually shall be explained. The role of the CHU shall be clarified as well. Reporting lines outside the organization shall also be mentioned (if applicable). Reference shall be made to professional standards. These standards shall include the international standards, promulgated by the global Institute of Internal Auditors, as well as any existing national standards. Reference can also be made to the standards.
