ACCA praises internal audit code update to global standards

ACCA has praised a proposed code for internal auditors for “clearly and concisely” reflecting and adopting global standards, while maintaining its relevance for the UK profession.

This is in response to a public consultation, which was issued by the Chartered Institute of Internal Auditors.

ACCA welcomed the way the draft looks across the whole of an organisation’s operations to “include all connectivity and interdependencies such as organisational culture, and capital and liquidity risks”.

However, ACCA – who has many members working in internal audit in the UK and across the globe – has raised some concerns over the combined Internal Audit Code of Practice for effective internal audit in the financial services, private and third sector. 

While the code has an outcomes-based approach, ACCA maintains it should explicitly signpost internal audit to focus on corporate strategic outcomes, what may prevent success, and how successfully the organisation manages and mitigates those risks.

ACCA has raised concerns about the lack of focus on third party internal audit functions and how the role of a third-party function may differ. The expectation in the Code is that all internal heads are employed directly, but the association argued this is not always the case.

Mike Suffield, director of policy and insights at ACCA, said: “ACCA recommends additional research into the success of the non-financial services code. Beyond the financial services sector, there is a lack of evidence of chief internal auditors attending executive meetings and being assimilated into the C-suite.”

Under the revised Code, ACCA said risk assessment covering ESG, financial crime and technology will require additional expertise, which may be difficult to find at a time of skills shortages.

Jessica Bingham, regional lead of policy and insights at ACCA, added: “ACCA is concerned about how such an ambitious code will be delivered. Skills, talent and retention issues are impacting the finance profession as a whole and this should be a consideration for the internal audit profession.”

ACCA, whose response reflects the views of its stakeholders, also suggested the draft code is clarified on the issue of proportionality and the risk-based approach with the specific aim of helping organisations with smaller internal audit functions.