Internal audit’s role is to provide overall assurance within the European Union’s corporate governance framework, the ECIIA says in its response to the EU Green Paper on the subject.
It argues that this is in line with the recommendations of the Basel Committee and with existing best practice among all types of businesses.
Internal audit should “be fully taken advantage of in order to monitor potential conflicts of interest or inconsistences or inefficiencies between control functions such as risk management or compliance and operational units,” it says in its response.
Given the wide variety of methods available for managing risk, the ECIIA says that it would be useful for the EU to recommend companies to adopt a suitable one and disclose to shareholders the framework they had chosen. It said methods such as those put forward by the Committee of Sponsoring Organisations of the Treadway Commission (COSO) were well known and understood.
The Confederation also says in its response that the Three Lines of Defense model of corporate governance provided the best explanation of the risk management and assurance responsibilities of management, risk and internal audit.
Click here for a copy of the response.