4 Code of Ethics of Internal Auditors- With Detail Explanation


IIA Code of ethics has a similar objective to other codes of ethics. Its main objective is to promote the ethical activities that perform by organizations or individuals which provide internal audit services.

The four typical common Internal Auditor codes of Ethics provided by IIA are Integrity, Objectivity, Confidentiality, and Competency.

This Code of Ethics should be followed by a qualified Internal Auditor who got CIA and related qualifications which are governed by IIA.

However, if you are not a member of IIA, but you are working in the internal audit roles of an organization, you are recommended to follow this ethic.

What is the code of ethics?

The internal Auditor code of ethics is the framework or guidance that sets out the minimum requirement for the internal audit profession to follow in order to maintain and promote the professional activities as we as adding value to the organization that internal audit services are being offered.

Internal code of ethics issued by IIA and applicable to be followed by individuals or organizations that offer internal audit services.

Why is the code of ethics importance?

The importance of the internal audit code of ethics is not just to make sure that internal audit professionals conduct ethical behavior, but these codes also help to make sure that the services being offered to the organization are really added value to the success of those organizations.

This code of ethics tries to make sure that internal auditor stays independent so that the judgment made by them might be biased to their personal benefit.

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And the internal audit activity will not only do not add value to the organization but also costs them a lot.

Intern auditor requires to keep confidential information that they access. This is very important to make sure that the organization’s internal information is not leaked to the public, competitors, and other concerning parties.

If the audit does not follow this ethical requirement, the trust of the auditor from other parties like clients or the public will be reduced and subsequently affect the body as a whole.

From the organization’s point of view, the organization will face impairment as the result of the leaking of that information.

In short, the code of ethics is very important as they try to make sure that the internal audit activities provide objective assurance, trust services, and more importantly, adding value to the organizations.

Chief of Internal Auditor should make sure that Internal Audit Charter is included in four of these Code of Ethics.

Here the detail of these four Code of Ethics of Internal Audit:

1) Confidentiality:

An internal audit is just like an external audit. It has the chance to access any kind of sensitive information about the company. Therefore, Internal Audit is not allowing to spread of that information to the third party without consensus from the owner.

However, in some situations, the confidentially followed by the internal auditor is against the public interest. In that situation, the internal auditor is required to get a consultant from a professional lawyer.

Internal Audit is required to follow this ethic at any time. Breach of this ethic might be discipline in many ways. First, it is from the International Body like IIA.

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Second, from the firm or company that that personnel working with. Second, it is enforced by the law of those countries.

2) Integrity:

Internal Auditors should perform their professional activities in accordance with applicable law and regulation. The professional activities should be avoided from any conflict of interest to personal benefit.

During its work, the internal auditor might be requested to perform or not to perform certain activities not comply with its professional work.

Most of those requests were reworded in terms of personnel benefits. If such a request happens, an internal audit should reject the principle of integrity.

3) Objectivity:

The internal audit work to add value to the company and shareholders. It should avoid any activities that are biased and impair both shareholders and the company. It also should avoid the activities that impair internal audit professionals.

Objectivity is very important and the quality of audit works is highly dependent on this point. If the audit works are bias or subjective, then the audit option or conclusion does not represent the real things that happen to the objective being review.

4) Competency:

Competency basically refers to skill, and knowledge that auditor requires to have to make sure they compete with their job or services. Those skills and knowledge include accounting and audit techniques.

As internal auditor requires to review operation and compliance with applicable law, they are required to have knowledge in those areas.

Importance Link:

IIA Code of Ethics