The Institute of Chartered Accountants of India (hereinafter referred as “ICAI” or “the Institute”) 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 (hereinafter referred as the Board)”
The objectives and functions of the Board are as follow:
(i) To review existing and emerging internal auditing practices worldwide and identify areas in which Standards on Internal Audit (SIAs) need to be developed.
(ii) To formulate Standards on Internal Audit, which may be issued under the authority of the Council of the Institute.
(iii) To formulate Guidance Notes on issues relating to internal audit, including those arising from the SIAs, or pertaining to any specific industry, which may be issued under the authority of the
Council of the Institute.
(iv) To continuously review the existing Standards and Guidance on Internal Audit and to undertake their revision, if necessary.
(v) To formulate and review Implementation Guides, Technical Guides, Practice Manuals, Studies and other papers which may be issued under its own authority for guidance of the members, as felt appropriate by the Board.
(vi) To undertake research and promote knowledge dissemination in
the field of internal audit.
Standards on Internal Audit (SIAs)
The Standards on Internal Audit (SIAs) are a set of minimum requirements that apply to all members1 of the ICAI while performing internal audit of any entity or body corporate.
As per Section 138 of Companies Act, 2013, the Board of a Company may, besides a Chartered Accountant, appoint a cost accountant or any other professional to conduct Internal Audits. The ICAI
recommends the adoption of the SIAs by non-members of the ICAI who are performing internal audits so as to ensure a consistent approach and quality in the discharge of their professional duties.
Guidance Notes on Internal Audit are primarily designed to provide guidance on matters of implementation or clarification on their applicability in certain circumstances.
The Board may issue the following guides (as appropriate):
(i) Implementation Guide: Best practices, methodologies or approach on how best to apply internal audit procedures in order to achieve the objectives of the SIA.
(ii) Technical Guide: Clarifications as to what extent the SIA applies in a certain industry or a particular situation, considering the technical or operational uniqueness of the same, and how best to achieve the objectives of the SIA.
The Implementation and Technical Guides are re commendatory 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.
The Preface to the Framework and Standards on Internal Audits is applicable for all internal audits beginning on or after a date to be notified by the Council of the Institute.
In case of SIAs issued by the ICAI for which a Guidance Note is already in existence, the Guidance Note shall stand withdrawn from the date on which the Standard comes into effect.