ICAI releases Standards on Internal Audits

Chartered Accountant

The Institute of Chartered Accountants of India ( ICAI ) has released Standards on Internal Audits prepared by the Internal Audit Standards Board.

The ICAI had constituted the Committee for Internal Audit (CIA) in February 2004, which in November 2005 was renamed as the “Committee on Internal Audit”. In November 2008, the Council renamed this Committee as the “Internal Audit Standards Board”.

Guidance Notes on Internal Audit are primarily designed to provide guidance on matters of implementation or clarification on their applicability in certain circumstances.

The Implementation and Technical Guides are recommendatory in nature. The Internal Auditor should ordinarily follow these recommendations except where, under particular circumstances, it may not be necessary or appropriate to do so.

With regard to the consideration of Fraud in an Internal Audit, the internal auditor should document fraud risk factors identified as being present during the internal auditor’s assessment process and document the internal auditor’s response to any other factors. If during the performance of the internal audit fraud risk factors are identified that cause the internal auditor to believe that additional internal audit procedures are necessary, the internal auditor should document the same.

It is said that the internal auditor should assess the operating effectiveness of the policies and procedures established by the management to identify, capture and communicate relevant information to the concerned persons in the entity to enable them to make timely and effective decisions and discharge their responsibilities efficiently.

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