The Institute of Internal Auditors Australia (IIA-Australia) has been actively representing the internal audit profession, making critical submissions and appearances to elevate the visibility and value of internal auditing in governance. Last week, two significant parliamentary reports were tabled in Canberra, each highlighting the vital role of internal auditing in enhancing transparency, accountability, and governance.
On 7 November 2024, the Parliamentary Joint Committee on Corporations and Financial Services tabled the report “Ethics and Professional Accountability: Structural Challenges in the Audit, Assurance and Consultancy Industry.” This report spotlighted key gaps in the professional licensing requirements for accountants and internal auditors. IIA-Australia’s contribution was noted in discussions on these “Gaps in code coverage for accounting and internal audit.” In this section, the IIA-Australia emphasised the need for mandating professional standards for internal audit consultants, aiming to strengthen accountability and governance. Although the primary recommendations centered on accounting, this report provides an important avenue for IIA-Australia to advocate for further advancements for the internal audit profession.
In addition, on 4 November 2024, the Joint Committee of Public Accounts and Audit tabled Report 506: Inquiry into Commonwealth Financial Statements 2022-23. Within this report, Recommendation 4 explicitly calls for the development of a mandatory framework with detailed guidelines for internal auditing across all Commonwealth entities, to be implemented by the Department of Finance within 12 months. This recommendation is a strong acknowledgment of internal audit’s essential role in public sector governance and a testament to the IIA-Australia’s ongoing efforts to ensure that robust auditing standards are adopted across government entities.
These developments underscore the increasing recognition of the internal audit profession’s value, largely driven by IIA-Australia’s advocacy efforts.
Cbus and Broader Governance Challenges
The internal audit profession is uniquely positioned to address governance shortcomings, including those highlighted in the Australian Securities and Investments Commission (ASIC)’s legal action against Cbus. Allegations of delayed claims handling and insufficient board oversight reflect systemic governance challenges that demand introspection and reform.
ASIC’s deputy chair, Sarah Court, rightly emphasised that superannuation fund directors must uphold the same governance standards as corporate board members. This principle aligns with IIA-Australia’s advocacy for strong, standardised governance practices across all sectors. As internal auditors, we ensure organisations adhere to regulatory requirements and ethical principles, serving as an essential line of defense against governance failings.
The Role of IIA-Australia
These recent events and reports underline the imperative for robust internal audit practice in safeguarding member trust and public accountability. At our Financial Services Assurance Forum 2024, IIA-Australia provided a platform for key stakeholders, including ASIC, to discuss what is required from the internal audit profession to navigate these challenges.
Through continued advocacy, thought leadership, and collaboration, IIA-Australia remains committed to elevating the internal audit profession. Whether addressing public sector frameworks or systemic issues in financial services, internal auditing’s role in fostering trust, accountability, and resilience has never been more vital.
The journey to enhanced governance is ongoing, but with the profession’s growing recognition, internal auditors stand ready to lead the way.
Trish Hyde
CEO, IIA-Australia