IPPF Evolution

Public Comment on Proposed Standards Starts 1 March

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Public Comment on Proposed Standards Starts 1 March

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IPPF Evolution
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Big changes are underway to improve !e IIA’s International
Professional Practices Framework (IPPF) including the International
Standards for the Professional Practice of Internal Auditing
(Standards). In 2020, the International Internal Audit Standards Board
embarked on an unprecedented and comprehensive update of the IPPF

including the Standards.

Now, the new Standards are almost ready! !e English version of the
proposed Standards dra" will open for public review and comment on
March 1 and continue through May 30, with versions in 23 languages also
coming.

A"er analyzing the responses and making necessary revisions, the

Standards Board expects to release the new Global Internal Audit
StandardsTM o#cially before the end of 2023.

WHAT IS THE CURRENT TIMELINE?

2021 – Research and benchmarking to develop and propose a new framework.

COMPLETED
2022 – Engage stakeholders broadly. Revise and develop the new proposed
Standards, based on research and stakeholder input. COMPLETED.
January – March 2023 – Translate the public comment dra".
March 1- May 30 – Expose the proposed dra" of the new Standards for public
comment.
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 March 1- May 30 – Expose the proposed dra" of the new Standards for public
comment.
Late 2023 – Release the new Standards.
2023 – Refresh the IPPF Guidance (Practice Guides) and relevant products.
Late 2024 – New Standards become e$ective 12 (TBD) months from the
release date.

WHAT ARE THE MAJOR CHANGES TO THE STANDARDS?

Here is a sneak peek into 10 major changes being proposed:

1 New name!
!e International Standards for the Professional Practice of Internal Auditing®
has been renamed the Global Internal Audit StandardsTM.
2 New structure.
!e content from six elements of the current IPPF (Mission, De%nition, Code of
Ethics, Core Principles, Standards, and Implementation Guides) is all
incorporated into the Global Internal Audit StandardsTM and organized into
%ve domains that more clearly indicate key roles and responsibilities:
Purpose of Internal Auditing: Contains elements of the current De!nition
and Mission of Internal Audit.
Ethics and Professionalism: Incorporates and builds upon the current Code
of Ethics.
Governing the Internal Audit Function: Focuses on the relationship
between the board and the chief audit executive.
Managing the Internal Audit Function: Focuses on the requirements for the
chief audit executive to manage the internal audit function e"ectively.
Performing Internal Audit Services: Focuses on performing assurance and
advisory engagements.
3 New sections in each standard.
Overall, the Global Internal Audit StandardsTM were designed to provide more
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 Overall, the Global Internal Audit StandardsTM were designed to provide more
clarity and help internal auditors deliver high-quality performance. Each
standard will include sections describing the requirements of the standard as
well as considerations for implementing the requirements and considerations
for providing evidence of conformance with the requirements. !e
“considerations for implementation” o$er common and preferred practices for
implementing the requirements, and the “considerations for evidence of
conformance” are examples of recommended ways to demonstrate that the
requirements have been implemented. !ese sections incorporate information
from the existing Implementation Guides and other authoritative guidance and
include nuances for the public sector and small internal audit functions, when
appropriate.
4 New Purpose of Internal Auditing.
!e Purpose of Internal Auditing — the %rst domain in the new Standards —
incorporates the Mission of Internal Audit and the De%nition of Internal
Auditing and for the %rst time addresses how internal auditing helps the
organization serve the public interest.
5 New Ethics and Professionalism domain and standards.
!e Code of Ethics has been incorporated into the Ethics and Professionalism
domain of the Standards. In addition, this domain contains standards on due
professional care, professional skepticism, and minimum requirements for
continuing professional development for all internal auditors.
6 New Governing domain and standards.

!e de%nition and use of the term “board” and the board’s role in governing the
internal audit function has been clari%ed. Board responsibilities related to the
internal audit function, which were implied or indirectly stated in the existing
Standards, are stated more directly and clearly. !ese include responsibilities
related to oversight of the performance of the chief audit executive and the
internal audit function, including external quality assessments.
7 New and di"erent requirements for the quality assurance and
improvement program.
!ere are new clari%cations and requirements for the QAIP, including a
description of the requirements for board oversight of the program and the
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 description of the requirements for board oversight of the program and the
requirement for at least one reviewer in an external quality review to be a
Certi%ed Internal Auditor (CIA).
8 Special attention to the public sector.
“Public sector” is now de%ned in the proposed Standards glossary, and the new
“considerations for implementation” section speci%cally addresses information
to assist internal auditors in the public sector.
9 Rigorous standard-setting process, with increased focus on stakeholders
and public interest.
!e public interest was considered intentionally when creating the new
standard-setting process and the Purpose of Internal Auditing, as well as when
updating other standards to consider stakeholders.
10 New terms and revised and expanded Glossary.
To provide clarity, the proposed Standards introduce and de%ne terms, such as
“criteria,” “condition,” “%nding,” “inherent risk,” “residual risk,” “risk tolerance,”
and “root cause,” commonly used when performing internal audit services.

HOW IS THE IPPF CHANGING?

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 !e Six elements of from the existing IPPF will be incorporated into the
new Global Internal Audit StandardsTM and will no longer exist as
independent elements.

!e new IPPF will bring all the separate mandatory elements of the current
framework together with the Implementation Guidance into the new
Standards.
Guidance will still exist as a recommended element in the new IPPF, which
allows for longer, more in-depth attention to internal audit practices and
subjects.
Additionally, Topical Requirements are being considered as an addition to the
Standards and Guidance. !ese are intended to address emerging topics in a
timely and succinct way.
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 The Evolution of IPPF and International Standards

HEAR AN OVERVIEW FROM THE STANDARDS BOARD CHAIRMAN

HOW CAN I LEARN MORE AND PARTICIPATE?

Bookmark this page and check back for the most current information.
Talk to colleagues and local IIA members about proposed changes to the
Standards.
Prepare to review and comment on the dra" of the proposed Standards
between March 1 and May 30, 2023.
Check out these additional resources:
NEW! Read Global Perspectives and Insights: Updating Standards for a
Changing World
“!e IIA’s Standards Are Evolving” by Judy Warner on InternalAuditor.org
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 “Building a Better Auditor: Setting Internal Audit Standards in the Public
Interest” by Dr. Lily Bi on InternalAuditor.org

WHO SHOULD RESPOND TO THE PUBLIC COMMENT DRAFT?

!e IIA’s overhaul of the IPPF and its elements will result in new
mandatory standards that impact the world. !e IIA undertakes this
project keeping in mind the public interest and how the new Standards
will lead to better overall public trust and con%dence. In addition to
internal audit practitioners, !e IIA welcomes engagement and comment
from individuals and organizations, including:

International standard-setters.
Regulators and oversight bodies.
Organizations that impact corporate governance, securities, %nancial stability,
and public interest.
Public and government sector organizations.

WHAT WENT INTO CREATING THE DRAFT OF THE NEW STANDARDS?

In accordance with its governing process, at least once every three years,
the International Internal Audit Standards Board is required to consider
whether changes are needed to the International Standards for the
Professional Practice of Internal Auditing. Starting in 2020, the Standards
Board embarked on a project to review not only the Standards, but also the
IPPF – the framework that contains the Standards – to determine whether
they remained adequate to guide the current practices of internal auditing
in today’s rapidly evolving global landscape. Based on extensive research
and input, the Standards Board set out to revise the IPPF and the
Standards in a way that would be responsive to the interests of
stakeholders while also better guiding internal auditors and the
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 stakeholders while also better guiding internal auditors and the
organizations they serve.

!e IPPF Evolution Project set out to accomplish #ve main goals:

Simplify the structure of the IPPF.

Clarify and align all elements.
Ensure that the Standards and Guidance are timely, practical, and applicable
and address emerging topics.
Communicate and advocate the Standards to not only internal auditors, but
also stakeholders and regulators.
Enhance internal audit performance and quality and preserve and enhance
organizational value.

!e Standards Board also extensively researched global standard-setting

bodies for benchmarking purposes and received advice from the IPPF
Oversight Council regarding its standard-setting process. !e Standards
Board improved its standard-setting process to ensure it received adequate
input from stakeholders, including consideration of the public interest.
In 2021 and 2022, the Standards Board solicited input from:

3,600 internal audit practitioners from 159 countries via a 2021 survey.
Representatives from 114 IIA Global A#liates via webinars, surveys, in-person
and virtual Q&A sessions, and two Global Assembly meetings.
More than 70 stakeholder organizations, including regulators and standard-
setting bodies.
5,000 practitioners and interested participants who attended a public webinar
detailing proposed changes.

WHEN WILL THE CIA, CRMA, AND INTERNAL AUDIT PRACTITIONER

EXAMS AND OTHER IIA PRODUCTS AND SERVICES BE UPDATED TO
REFLECT THE NEW STANDARDS?
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 REFLECT THE NEW STANDARDS?

!e IIA’s current timeline targets late 2024 as the e$ective date for the new
Standards. !e IIA will issue a formal transition plan for products and
services in late 2023. Exams will not be updated before the new Standards
become e$ective.

WHEN WILL THE NEW STANDARDS BE IN EFFECT FOR A QUALITY

ASSESSMENT?

!e Standards will be e$ective for quality assessments 12 months a"er

they are published. !ere are several options for conducting your next
quality assessment. If your next assessment is due in 2023 or early 2024,
you should proceed with your assessment when due under the existing
IPPF. If your assessment is due in late 2024 or in 2025, you can choose to
accelerate your assessment under the existing IPPF in 2023 or early 2024.
If your assessment is due in 2025, you can elect to have a gap assessment
performed by IIA Quality Services in 2024 to assess your readiness in
implementing the new Standards.

WHEN WILL THE QUALITY ASSESSMENT MANUAL FOR THE INTERNAL

AUDIT ACTIVITY BE UPDATED TO REFLECT THE NEW STANDARDS?

!e current quality assessment manual remains in e$ect and valid until

updated. As the new Standards are established, a new quality assessment
manual will be published in late 2023 or early 2024. It is anticipated that
the new manual will provide direction on the new Standards as well as
other guidance issued in support of the new Standards.

HOW DOES THE IIA SET THE STANDARDS?

!e International Internal Audit Standards Board is responsible for

reviewing and updating the Standards on an ongoing basis. !e Standards
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 reviewing and updating the Standards on an ongoing basis. !e Standards
Board reviewed its standard-setting process to ensure its rigor,
transparency, and responsiveness to stakeholders. !e result was an
increased focus on standard-setting in the public interest and an enhanced
approach to soliciting and carefully considering input from stakeholders
interested in the future of internal auditing standards.

!e IIA has established a governing framework for setting the Standards

that includes:

A permanent structure (International Internal Audit Standards Board) that

represents balanced, diverse, and global participation.
Due process that promotes the development of timely, relevant, and high-
quality standards to keep up with signi%cant changes to the internal audit
profession and simultaneously ensure transparency and meaningful
accountability to stakeholders.
Independent oversight by an independent oversight council (IPPF Oversight
Council) to ensure that the Standards Board adheres to sound governance and
due process, considers input from all stakeholders, and serves the public

interest. Members of the Oversight Council include representatives from the

International Federation of Accountants (IFAC), International Organization of
Supreme Audit Institutions (INTOSAI), National Association of Corporate
Directors (NACD), Organisation for Economic Co-operation and Development
(OECD), and the World Bank.

!e IPPF Oversight Council, together with !e IIA, issued the “Framework

for Setting Internal Audit Standards in the Public Interest” in March 2022.
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