The Institute of Internal Auditors - Australia would like to highlight the Third Edition of the ASX Corporate Governance Council Guidelines and Recommendations for listed entities.
Specifically, we draw attention to the new recommendation 7.3 which states:
"A listed entity should disclose:
- if it has an internal audit function, how the function is structured and what role it performs; or
- if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes."
Not only is internal audit acknowledged as providing an important governance function, its linkage to providing effective risk management and internal control processes is recognised.
This is a significant development for the profession and brings the Australian market in line with international developments.
As a leading practice document the revised ASX Corporate Governance Guidelines are likely to impact on all entities across Australia, not just listed entities. Government regulators are likely to take note of this inclusion as are NFP organisations and private companies.
As a founding member of the ASX Corporate Governance Council in 2002, this recommendation is the culmination of many years of lobbying by IIA-Australia, particularly over the past 12 months. Importantly for members, its inclusion as a recommendation serves to elevate the profession of internal auditing across Australia.
The ASX CGC Guidelines and Recommendations came into effect on Tuesday, 1 July 2014. The IIA-Australia press release
Full documents, including tracked change versions of the Principles and Recommendations can be found at the ASX Corporate Governance Council website.