Internal Audit Standards and Code of Ethics For Internal Auditors of Public Bodies of The Government of Ethiopia
Internal Audit Standards and Code of Ethics For Internal Auditors of Public Bodies of The Government of Ethiopia
Internal Audit Standards and Code of Ethics For Internal Auditors of Public Bodies of The Government of Ethiopia
Standard: The Standards define the way in which the Internal Audit Service should be
established and undertake its functions. The Standards cover both the attributes (characteristics)
and performance of internal audit service in public bodies.
Code of ethics: The Code of Ethics includes principles that are relevant to the professional and
practice of internal auditing and rules of conduct that describes behavioral norms expected from
internal auditors of the public bodies.
The purpose of Code of Ethics is to promote an ethical culture in the profession of internal
auditing.
ATTRIBUTE STANDARDS
The Head of Public Body is responsible for establishing policies, procedures and operations for
appropriate management of risk, the reliability of internal and external reporting and
accountability processes, compliance with applicable laws and regulations, and compliance with
the behavioral and ethical standards set for the public body in order to ensure the achievement of
its objectives.
Audit committees should be formed constituting employees of the Public Body who have an
appropriate knowledge of its day to day operations and can assist the Internal Audit in
discharging its responsibilities.
The Internal Audit is responsible for an independent, objective assurance and consulting activity
designed to add value and improve the public body’s operations.
Internal audit should fulfill its duty by systematic review and evaluation of risk management,
control and governance which comprises the policies, procedures and operations.
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200 INDEPENDENCE
210 The Principles of Independence
Internal audit should be sufficiently independent of the activities, which it audits to enable
auditors to perform their duties in a manner, which facilitates impartial and effective professional
judgments and recommendations. It should have no executive responsibilities.
Internal audit should report directly to the Head of the Public Body and Audit Committee of the
Public Body.
The Head of Internal Audit should be graded with sufficient status to facilitate the effective
discussion and negotiations of the results of internal audit work with senior management in the
organization.
Individual auditors should have an impartial, unbiased attitude, characterized by integrity and an
objective approach to work, and should avoid conflicts of interest. They should not allow
external factors to compromise their professional judgment.
Individual auditors should declare any conflicts of interest arising from audit work assigned to
them by the head of Internal Audit.
260 Proficiency and Due Professional Care
Proficiency
Internal auditors should possess the knowledge, skills, and other competencies needed to perform
their individual responsibilities.
Due Professional Care
Internal auditors should apply the care and skill expected of a reasonably prudent and competent
internal auditor. Due professional care does not imply infallibility.
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Internal Audit provides a service to management. Its strategy, planning and delivery should aim
to maximize the value added for management without jeopardizing internal audit’s
responsibilities to the management.
Where Internal Auditors need to work with Internal Auditors of another organization, the roles
and responsibilities of each party should be agreed and endorsed by the Head of each Public
Body.
Internal audit should seek to meet regularly with the external auditor to consult on audit plans,
discuss matters of mutual interest, discuss common understanding of audit techniques, methods
and terminology and seek opportunities to rely on their work where appropriate, provided this
does not prejudice internal audit’s independence.
The Ministry of Finance and Economic Development is responsible for ensuring that they have
access to the full range of knowledge, skills, qualifications and experience to meet the unit’s
audit objectives and these standards.
II PERFORMANCE STANDARDS
The Head of Internal Audit should develop and maintain a strategy for providing the Head of
public body economically and efficiently, with objective evaluation of an opinion on the
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effectiveness of the public body’s risk management, control and governance arrangements. The
internal audit activity should evaluate risk exposures relating to the public body's governance,
operations, and information systems
Internal audit should prepare periodic work plans, designed to implement the audit strategy for
approval by the Head of the Public Body.
For each audit assignment a detailed plan should be prepared and discussed with the Head of the
public body. These plans should establish detailed objectives for the assignment, the level of
assurance that management wishes to derive from the opinion to be delivered, resource
requirements, audit outputs and target dates.
The internal auditors should assess and improve the public body’s risk management, control, and
governance processes.
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The Internal Auditor should systematically assess and integrate professional judgment about
probable adverse conditions and/or events. The risk assessments process should provide a means
of organizing and integrating professional judgment for development of a prioritized audit work
schedule.
The Internal Auditor should document in the working papers the following aspects of the audit
process of:
• Planning, examination and evaluation of the effectiveness of risk management;
• Control and governance process;
• The auditing procedures performed and the conclusion reached, review, reporting and follow-
up.
Audit working papers are the property of the public body being examined.
Audit working papers should remain under the control of the Internal Audit
Department and the Head of the Public Body should approve request for access to it by parties
outside the public body.
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REPORTING OF FRAUD
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Internal Auditors are responsible for establishing objectives that include planning and
performing a scope of work which provides a reasonable basis for reporting on the extent of
public body compliance with policies, plans, procedures, laws and regulations
1200 REPORTING
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The Internal Auditor should determine appropriate follow-up procedures depending upon the
significance of the reported findings; risks that may occur should the corrective action fail and
the complexity of the corrective action. The Internal Auditor should also consider the degree of
effort, the time period involved and the cost needed to correct the reported condition.
CODE OF ETHICS
Internal auditors are expected to apply and uphold the following principles:
Integrity
Integrity is the core valve of a Code of Ethics. Internal auditors have a duty to adhere to a high
standard of behavior (e.g. honesty and candidness) in the course of their work.
Objectives
Objectivity is a state of mind that has regard to all considerations relevant to the activity or
process being examined without being unduly influenced by personal interest or the views of
others.
Confidentiality
Members of the internal audit team should safeguard the information they receive in carrying out
their duties.
Competency
Members of the internal audit team should apply the knowledge, skills and experience needed in
the performance of their duties.
RULES OF CONDUCT
1. Integrity
Internal Auditors:
1.1 shall perform their work with honesty, diligence, and responsibility;
1.2 shall observe the law and make disclosures expected by the law and the profession;
1.3 shall not knowingly be a party to any illegal activity, or engage in acts that are
discreditable to the profession of internal auditing or to the organization;
1.4 shall respect and contribute to the legitimate and ethical objectives of the organization.
2. Objectivity
Internal Auditors:
2.1 shall not participate in any activity or relationship that may impair or be presumed to
impair their unbiased assessment. This participation includes those activities or relationships that
may be in conflict with the interests of the organization.
2.2 Shall not accept anything that may impair or be presumed to impair their professional
judgment.
2.3 Shall disclose all material facts known to them that, if not disclosed, may distort the
reporting of the activities under review.
3. Confidentiality
Internal Auditors:
3.1 shall be prudent in the use and protection of information acquired in the course of their
duties.
3.2 Shall not use information for any personal gain or in any manner that would be contrary
to the law or detrimental to the legitimate and ethical objectives of the organization.
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4. Competency
Internal Auditors:
4.1 Shall engage only in those services for which they have the necessary knowledge, skills
and experience.
4.2 Shall perform internal auditing services in accordance with the Internal
Audit Standards of Public Bodies of Government of Ethiopia.
4.3 Shall continually improve their proficiency and the effectiveness and quality of their
services
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