Question

the internal audit charter authorizes access to records, personnel and physical property reevant to the performance of engagements and defines the scope of internal audit activities.

True or false?

Answer 1

True, the internal audit charter authorizes access to records, personnel and physical property relevant to the performance of engagements and defines the scope of internal audit activities.

As per IIA (the Institute of Internal Auditors), the charter is a formal document approved by the governing body and/or audit committee (governing body) and agreed to by management. It must define, at minimum:

• Internal audit’s purpose within the organization.
• Internal audit’s authority.
• Internal audit’s responsibility.
• Internal audit’s position within the organization

Also as elaborated by IIA, in International Standards for the Professional Practice of Internal Auditing Standard 1000:

A charter provides the organization a blueprint for how internal audit will operate and helps the governing body to clearly signal the value it places on internal audit’s independence. Ideally it establishes reporting lines for the chief audit executive (CAE) that support that independence by reporting functionally to the governing body (or those charged with governance) and administratively to executive management. It also provides the activity the needed authority to achieve its tasks, e.g., unfettered access to records, personnel, and physical properties relevant to performing its work.

1000.A1 – The nature of assurance services provided to the organization must be defined in the internal audit charter. If assurances are to be provided to parties outside the organization, the nature of these assurances must also be defined in the internal audit charter.

1000.C1 – The nature of consulting services must be defined in the internal audit charter.