The Institute of Chartered Accountants of India (ICAI) has revised its internal audit standards to strengthen internal audit practices in the country. The current revision, approved by the ICAI council last week, addresses issues such as effects of laws and regulations in conducting internal audit, responsibility of management for compliance with laws and regulations, responsibility of internal auditor and internal audit procedures.
The new system — the Standard on Internal Audit (SIA) 17 — distinguishes the internal auditor’s responsibilities in relation to compliance with two different categories of laws and regulations, one that have direct effect on financial statements and other that have significant impact on the functioning of the entity, an ICAI statement said.
“The internal audit in itself has, for one, been a niche area for the members of the Institute, and second, the Indian economy today needs the value addition made by the modern-day internal audit to help its corporate face the acerbic competition both at domestic and international frontiers,” it said.
With the issuance of the new standard, the tally of SIAs issued by the Institute now stands at 17. In addition to providing performance benchmarks to the internal auditors, these SIAs aim to bring in greater consistency, standardisation and independence in the internal audit activity.
Since SIA codifies best practices in the field, the Institute, through its Internal Audit Standards Board (IASB), has devoted a lot of attention and resources on the development and propagation of these standards.
Further, in order to enhance awareness about SIA, the ICAI Council has also approved to host the complete text of the SIAs on the institute’s website for free download.
This would also help the members to improve the quality of their internal audit practice through understanding and implementing SIAs, the statement added.