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November 2023: IASAB will develop material for the UK public sector when the new global internal audit standards are issued

The International Internal Auditing Standards Board (IIASB) completed its consultation on new professional standards in May 2023. Nearly 19,000 specific comments came from 1,612 completed surveys. Development of the finalised standards is underway, and it is anticipated that these will be issued early in 2024, with application at some time in 2025.

The IASAB will undertake a review of the new global standards when they are issued. The format of the proposed new global standards is different from the current IPPF and some of the content is expected to be different. The IASAB will seek to determine the implications for the PSIAS as soon as possible, and will develop proposals for revised material which will be suitable for the UK public sector context.

Any subsequent changes to the UK’s PSIAS, and their implementation, will be subject to consultation and appropriate transitional arrangements.

 

May 2023: IASAB has responded to the consultation on global internal audit standards 

IASAB responded to the International Internal Auditing Standards Board (IIASB) consultation on new professional standards on 30 May 2023. The response is available here

The Internal Audit Standards Advisory Board (IASAB) generally supports the proposed new standards and welcomes their ambition. There were, however, some areas where IASAB felt that the approach might have the unintended effect of impeding the application of some recent improvements, innovations and best practice in the UK. To provide necessary flexibility with the application of the Global Standards, IASAB has recommended that the new standards should be set within a principles-based approach.  Additionally, the IASAB welcomed the consideration of the public sector within the new standards, but noted that the public sector material included was more jurisdiction specific than is appropriate for use in international standards.  IASAB considers it would be more appropriate for material of this sort to be developed locally by public sector auditors with relevant knowledge and understanding of their jurisdictional circumstances and requirements.  Such an approach could be based on a statement of principles reflecting the distinctive characteristics of the public sector. The response also noted that the existing standards acknowledge that internal audit is not the sole preserve of members of the Institute of Internal Auditors, and that this appropriate and helpful observation should be maintained in the new standards

The IASAB awaits the IIA’s consideration of the responses to its global consultation, and will undertake a review of PSIAS against the new global standards when they are confirmed by the IIA.  Any subsequent changes to the UK’s PSIAS, and their implementation, will be subject to consultation and appropriate transitional arrangements.

 

December 2022: Responding to global developments in internal auditing standards

Background to current developments

UK Public Sector Internal Auditing Standards (PSIAS) are based on the International Professional Practices Framework (IPPF) developed by the Institute of Internal Auditors (IIA), interpreting its requirements for the UK public sector context. The International Internal Auditing Standards Board (IIASB) is currently undertaking a fundamental review of the IIA framework, and significant changes are expected. An exposure draft of a revised framework will be issued in early 2023, and it is anticipated that new requirements will be issued later that year, to become effective in 2024.

More information on the evolution of the framework can be found at https://www.theiia.org/en/content/communications/2022/november/the-latest-in-the-iias-evolution-of-the-ippf-and-the-standards/

 and this links to a webinar hosted by the IIA in September which set out the latest thinking at that time.

The UK Public Sector Internal Auditing Standards Advisory Board (IASAB) has been tracking developments, keeping in touch with IIA and considering the practical implications for practitioners in the UK public sector.

Obviously it is important that suitably high standards are followed in the UK public sector, but the Board is also keen to ensure that there is clarity for internal audit teams in the sector over which standards apply at a particular time. It is also important that there is minimum disruption on transition to the new standards and framework.

Key things which IASAB will do

• IASAB will make sure there is clarity over which standards apply to specific reporting periods, engagements and overall opinions
• IASAB will contribute to the development of the new International Professional Practices Framework (IPPF), by responding to the Exposure Draft consultation having regard to the concerns and requirements of the UK public sector
• IASAB will respond to developments in the new IPPF, and if appropriate will develop revised PSIAS or other material to help UK public sector internal auditors to apply the new IPPF to the specific circumstances
• IASAB will seek to minimize any disruption in transition between old and new standards

Opportunities for you to have your say!

Heads of Internal Audit / Chief Audit Executives and other internal audit practitioners are encouraged to review developments. You may wish to respond to the IIASB consultation on the new IPPF standards when the exposure draft is issued in early 2023.

Once the form and nature of the new framework is known, IASAB will develop proposals on how to apply the new IPPF. Although the IASAB will monitor developments closely, new material cannot be finalized until the shape of the new IPPF is clear. Only at that stage can it seek definitive views from stakeholders in UK public sector internal audit, but IASAB will aim to keep practitioners aware of developments.  Your input to the consultation process is vital.