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New UK Application Note replaces UK PSIAS from 1 April 2025

The Application Note: Global  Internal Audit Standards in the UK Public Sector has been issued by the Relevant Internal Audit Standard Setters (RIASS), who between them have authority for determining standards to be applied in the various parts of the UK public sector. Taken together, the Global Internal Audit Standards and the Application Note will form the basis of UK public sector internal audit effective from 1 April 2025. The effective date aligns the new standards with requirements for annual opinions and other relevant aspects of UK public sector governance which align with the financial year.  Until 1 April 2025, the existing PSIAS based on the old International Professional Practices Framework will continue to apply.

The Application Note will be periodically reviewed by the UK Public Sector Internal Audit Standards Advisory Board (IASAB), having regard to any developments in the Global Internal Audit Standards and related material. The Board will for example consider on a case by case basis whether any Topical Requirements issued by the Institute of Internal Auditors should be mandated in the UK public sector.

Simon Edge, Chair of IASAB said:

As Chair of the UK Public Sector Internal Audit Standards Advisory Board (IASAB), I am delighted to announce the publication of the new UK Application Note developed by the IASAB and adopted by the RIASS.

The Institute of Internal Auditors’ improvements to the content and format of the new Global Standards has enabled the IASAB to develop the new Application Note approach rather than recreate another version of PSIAS.  I am grateful to IASAB, which includes members from each of the RIASS and other stakeholders in UK public sector internal audit for their energy, commitment and expertise in agreeing the new Application Note approach and content.  I am similarly grateful to those who responded to the IASAB’s public consultation, whose comments have informed the final document.

As successor to the PSIAS, the Application Note will allow internal audit functions to continue to demonstrate conformance with well understood professional standards, while also having regard to the specific circumstances of the UK public sector.

March 2024 - New global internal audit standards – IASAB plan for UK public sector implementation

On 9 January 2024 new Global Internal Audit Standards (GIAS) were issued, which the Institute of Internal Auditors(IIA) has determined will become globally effective from 9 January 2025. They will then replace the International Professional Practice Framework, the mandatory elements of which are the basis for the current UK public sector internal auditing standards (the PSIAS).

The PSIAS are issued under the authority of the Relevant Internal Audit Standard Setters (RIASS) who are HM Treasury, the Scottish Government, the Department of Finance Northern Ireland and the Welsh Government, the Department of Health and Social Care and the Chartered Institute of Public Finance and Accountancy. Between them the RIASS determine what standards or other requirements are applicable to the practice of internal auditing in central government, local government and the health sector across the UK.

The RIASS have agreed to use the new GIAS as the basis for internal auditing for the UK Public Sector, and have asked the UK Public Sector Internal Auditing Standards Advisory Board (IASAB) to carry out a review of the new standards with a view to identifying and producing any sector specific interpretations or other material needed to make them suitable for UK public sector use.

Development of IASAB material will be progressed with appropriate consultation with UK practitioners and other stakeholders in UK public sector internal auditing. The IASAB plans to issue consultation material by September 2024 at the latest, with a consultation period of at least 8 weeks.

Having regard to the points raised by respondents the IASAB will prepare final material for application in the UK public sector together with guidance on transition. Subject to approval by the RIASS, these will be issued later in 2024 to allow sufficient time for preparation for implementation.

The effective date of the new material developed by IASAB will be 1 April 2025, to align with requirements for annual opinions and other relevant aspects of UK public sector governance which line up with the financial year. Until then, the existing PSIAS based on the old International Professional Practices Framework will continue to apply but organisations are encouraged to undertake preparatory work to allow them to implement the new requirements when they become effective. The IASAB will review whether there are any issues in relation to assessment of conformance during the period from January to March 2025 and if needed will address these in the guidance on transition.

January 2024: New global internal audit standards are issued - IASAB has started its for review the UK public sector

The International Internal Auditing Standards Board (IIASB) has issued the new Global Internal Audit Standards

The IASAB has begun its review of the new global standards. The format of the new standards is different from the current IPPF and some of the content is different. The IASAB will determine the implications for the PSIAS 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.

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. Read the IASAB response.

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.