AUD679 TOPIC 2

AUD679 Notes | Nursyazwani Izaty, 2024
TOPIC 2: INTERNATIONAL PROFESSIONAL PRACTICES FRAMEWORK (IPPF)
IPPF
• Issued by the IIA, which provides a structural blueprint that facilitates consistent
development, interpretation and application of concepts, methodologies and techniques
useful to the internal audit profession
CORE PRINCIPLES OF IPPF
• Demonstrates integrity
• Demonstrates competence and due professional care
• Is objective and free from undue influence (independent)
• Aligns with strategies, objectives, and risks of the organization
• Is appropriately positioned and adequately resourced
• Demonstrates quality and continuous improvement
• Communicates effectively
• Provides risk-based assurance
• Is insightful, proactive and future-focused
• Promotes organizational improvement
CODES OF ETHICS OUTLINED BY IPPF
1. Integrity
- The integrity of internal auditors establishes trust and thus provides the basis for
reliance on their judgment. Integrity relates to honesty, straightforwardness and
trustworthiness.
2. Objectivity
- Rendering unbiased judgment. IA exhibit the highest level of professional
objectivity in gathering, evaluating and communicating information about the
activity or process being examined.
3. Confidentiality
- IA should respect the value and ownership of information they receive and do not
disclose information without appropriate authority unless there is a legal or
professional obligation to do so.
4. Competency
- IA shall apply the knowledge, skills, and experience needed in the performance of
IA services.
INTERNATIONAL STANDARDS FOR THE PROFESSIONAL PRACTICE OF INTERNAL

AUDITING (STANDARDS)
• IPPF prescribed that conformance with IIA’s IPPSA is essential in meeting the
responsibilities of internal auditors and internal audit activity.
• If IA or IA activity is prohibited by the law and regulation from conformance with certain
parts of the Standards, conformance with all other parts of the Standards and
appropriate disclosures are needed.
PURPOSE OF THE IPPSA (STANDARDS)
1. Delineate the basic principles that represent the practice of internal auditing
2. Provide a framework for performing and promoting a broad range of value-added
internal auditing
3. Establish the basis for the evaluation of internal audit performance
AUD679 Notes | Nursyazwani Izaty, 2024
4. Foster improved organizational processes and operations

STRUCTURE OF ISPPIA
3 Components:
1. Attribute Standards
- Address the attributes of organizations and individuals performing internal auditing
2. Performance Standards
- Describe the nature of internal auditing and provide quality criteria against which
the performance of these services can be measured
3. Implementation Standards
- Provided to expand upon the Attribute and Performance standards, by providing
the requirements applicable to assurance or consulting activities components
TERMS APPLIED IN THE STANDARDS
“Must” – specify an unconditional requirement
“Should” - conformance is unexpected unless, when applying professional judgment,

circumstances justify deviation
ETHICS
• Set of moral principles, valued or acceptable behavior
• A set of moral principles that distinguish between what is right and what is wrong
ROOTS OF UNETHICAL BEHAVIOUR
• Favour our own interest over well-being of shareholders/stakeholders
• Willing to abuse position/power to enhance individual interest
• Rewards for behaviours that violate ethical behaviours
• Managerial values undermine integrity
IIA’S CODE OF ETHICS
Purpose:
• All members of IIA must maintain high standards of conduct in order to effectively
discharge their responsibility
• The purpose of Code of Ethics is to promote an ethical culture in the profession of
internal auditing
Applicability and Enforcements:

• The code is applicable to all members of the IIA
• Code of ethics applies to both individuals and entities that provide internal auditing
services
Violation of the Codes:

• Subject to forfeiture of the IIA’s membership or CIAs designation

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AUD679 Notes | Nursyazwani Izaty, 2024

TOPIC 2: INTERNATIONAL PROFESSIONAL PRACTICES FRAMEWORK (IPPF)

INTERNATIONAL STANDARDS FOR THE PROFESSIONAL PRACTICE OF INTERNAL

4. Foster improved organizational processes and operations

“Should” - conformance is unexpected unless, when applying professional judgment,

Applicability and Enforcements:

Violation of the Codes:

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