Green Paper “Audit Policy: Lessons from the Crisis”

The ECIIA (the European Confederation of Institutes of Internal Auditing) would like to thank DG-MARKT for offering the opportunity to comment on your Green Paper “Audit Policy: Lessons from the Crisis”.

The ECIIA is a confederation of national associations of internal auditing located in 35 countries, including all those of the EU, representing over 35000 internal audit professionals. As such, the ECIIA is an Associated Organisation of the global Institute of Internal Auditing (the IIA), a professional organisation of more than 170000 members in some 165 countries. Throughout the world, the Global IIA is recognised as the internal audit profession's leader in certification, education and research regarding internal auditing. The Global IIA also maintains the International Professional Practices Framework (IPPF) which includes the International Standards for the Professional Practice of Internal Auditing (available in 29 languages), the definition of internal auditing, the code of ethics, practice advisories and other guidance. (http://www.theiia.org/guidance/standards-and-guidance/interactive-ippf/.) While we understand that the goal of this paper is to launch a debate on the (future) role and scope of the statutory audit function in the context of financial market regulatory reform, Chapter 2 “Role of the Auditor” includes some thoughts and suggestions which impact, directly or indirectly, the internal audit function and for which we would like to offer our general comments, in addition to answering some specific questions.

As an overall comment, the ECIIA believes that a debate on the role and the scope of the external auditor as a major contributor to increased financial stability should also include clarification on the role of internal auditors and more specifically their interaction with other assurance providers – including external auditors. In addition to adding value to this debate, a proper consideration of internal audit’s contribution to improved governance- and risk management structures in future regulatory initiatives will add to increased financial stability.

Further detail this overall comment in relation to some of the statements in the Green Paper can be found if you click here.