Appropriate governance arrangements are essential to enable the internal audit function to be effective. Domain III of the Global Internal Audit Standards 2024 outlines the requirements for chief audit executives to work closely with the board/audit committee to establish the internal audit function, position it independently, and oversee its performance.
Domain III also outlines senior management’s responsibilities that support the board/audit committee’s responsibilities and promote strong governance of the internal audit function. While the chief audit executive is responsible for the requirements in this domain, activities of the board/audit committee and senior management are identified as “essential conditions” in each Standard and establish a necessary foundation for an effective dialogue between the board/audit committee, senior management, and the chief audit executive, ultimately enabling an effective internal audit function.
Learning objectives:
- Have a clear understanding of Domain III and recognize the challenges it may present for you and your board/audit committee.
- Have the discussions needed to inform the board/audit committee and senior management about the importance of Domain III and the essential conditions.
- Discuss the potential impact on the effectiveness of the internal audit function if the board/audit committee or senior management does not provide the support outlined in the essential conditions.
- Understand how the absence of agreement around the essential condition(s) may affect the internal audit function’s ability to fulfill its purpose or conform with specific standards.
- Identify that if one or more of the essential conditions are not necessary to conform with the Standards how this would be documented.
