INTERNAL AUDIT should be a key principle of the Corporate Governance Code, according to the Chartered Institute of Internal Auditors.
Chief executive Dr Ian Peters (pictured) said: “It is in there but it’s squirreled away in the detail at the bottom – it should be given greater prominence.”
Internal audit provides the board with assurances that a company’s risks are being managed. It is a forward-looking function, according to Peters, rather than the rear-view-mirror snapshot of external audit.
He said the internal function is integral to commercial success and that its profile should be raised. “By way of the Corporate Governance Code, companies should be advised to do it and forced to disclose why such a system is not place.”
However, Peters is not in favour of internal audit being made mandatory, saying it is not always appropriate in every organisation and that such legislation could lead to a complacent tick-box mentality.