internal audit

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Internal audit’s central role in the future of corporate reporting NEW
July 2016

Internal audit has a central role to play in the future of corporate reporting as an adviser on, and a builder and consolidator of the reporting process itself, according to the ECIIA’s response to a consultation on the issue by the Federation of European Accountants (FEE).

“Internal audit adds value to corporate reporting by providing an informed and independent review on processes, risks and controls,” ECIIA President Henrik Stein said in the confederation’s formal response to FEE.

In the future, developing integrated thinking would be critical if organisations were to be able to present a coherent and comprehensive picture of their long-term strategy and performance, he said. This would require the creation of cross-functional teams, which would include all key areas within the organisation.

He said organisations needed to adopt clear and unambiguous assurance models to report effectively.

“It is necessary for internal and external assurance providers to form a common view on issues of relevance, materiality, accuracy and completeness,” he said. “Combined assurance is needed to achieve an informed view on whether reports are fair and balanced and also to improve efficiency.”

FEE has been consulting on how to evolve corporate reporting in a way that will keep pace with the developing economic reality and address the needs of a wider stakeholder audience.

To read ECIIA’s response, click here.

To visit FEE’s page on corporate reporting, click here.

Internal auditors should be included in communication between auditors and supervisors
January 2016

Internal auditors should be included in the communication process over the scope of work to be undertaken by the statutory auditors and supervisors of credit institutions, the ECIIA has told the European Banking Authority.

In a written response to the EBA’s consultation on how auditors and supervisors could exchange information better – EBA/CP/2015/17  – ECIIA says: “Communication between competent authorities and statutory auditors, as deemed prudent at any phase of the supervisory or audit processes, may be enhanced by the inclusion of the internal auditors of the credit institution.”

Since both statutory auditors and supervisors may rely on the work of internal audit, speaking with the function would help provide greater confidence about the activities of internal audit and help to focus work on those areas that most need it.

ECIIA also says better clarification is needed between the 2nd and 3rd lines of defence by the document.

It also recommends that the quality of internal audit functions at credit institutions be assessed against how well they comply with International Professional Practices Framework 

To read the full response, click here.

 

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