Internal Audit Quality

Chapter 8Internal Audit Charter

The higher we report, the more valuable our work. The earlier we get involved when the organization undergoes strategic decision making, the better. We want to provide solutions, not just find problems. And we need to present those solutions in a way that makes it more likely they will be accepted and implemented.

—Phil Tarling, IIA Chairman of the Board, 2012

The internal audit charter defines internal audit's mandate and purpose. It is a subset of the overall internal audit strategy—articulating the professional and organizational authority of the internal audit function.

The charter should identify the strategic and organizational context in which internal audit operates. It defines the structure and position of the internal audit function and should confirm the independence of internal audit within the organization.

Internal Audit Mandate and Purpose

In order for any organization or activity to operate at a consistently high standard, there must be a clear, shared understanding of its mandate or purpose. Internal audit functions are no different. Their mandate, or purpose, should be well understood, and this understanding should be shared across the organization. The documented mandate should provide the organization with a clear understanding of what the internal audit function is (its raison d'être).

The IIA's (2013) definition of internal auditing provides a useful basis for creating a mandate or purpose statement:

Internal auditing ...