Internal audit in financial services
A new benchmark
Internal audit has long been viewed as a key element of financial services firms’ frameworks to manage risk – the third line of the three lines of defence. But now there is new guidance that raises the bar of good performance.
The Committee on Internal Audit Guidance for Financial Services has issued its recommendations for Effective Internal Audit in the Financial Services Sector following a year‑long exercise of drafting and consultation. The Chartered Institute of Internal Auditors has accepted the recommendations in full.
The guidance seeks to reposition the focus of internal audit, from testing and reporting on the internal control environment to supporting non‑executive and executive management in the more effective management of key risks.
Every internal audit function should perform an assessment of the impact the guidance has on the function and on the audit plan, and determine an appropriate response. This assessment should be discussed with executive management and agreed with the Audit Committee.