1. INTERNAL AUDIT AS AN INDEPENDENT AUDITBODY FOR THE WHOLE COMPANY

2. Key Points Internal Audit must carry out standardized audits globally and independently. Organizational standards and procedures for doing so must be developed. Other measures are also needed to properly establish an internal auditfunction that is active throughout the organization. Internal cost/benefitanalyses and the general positioning of Internal Audit within the companyshould also be documented. Internal Audit must be able to work independently and objectively. Oneprerequisite for independence is an appropriate organizational position withinthe company. 3. Core Competencies Of Internal AuditFrom the Board of Directors perspective, the following main aspects must be addressed: The organizational structure of Internal Audit. his may be defined by function,region/country, line of business, etc. Internal Audits position within the organization, such that the department is able tomaintain independence and the auditors are able to carry out their responsibilitiesobjectively. Ideally, this includes reporting administratively to the CEO and functionally tothe Audit Committee. The definition of the entire audit process, including all internal standards andquality assurance actions. Description of all relevant audit fields (e.g. operational audits, financial audits)and the areas within the audit fields. Definition of all reporting paths and the content of audit reports. Scenarios for extraordinary audit requirements or activities. liaison with other internal and external compliance units, such as risk managementand external auditors. 4. Maintaining IndependenceIt is essential that Internal Audit remain independent. Internal Audit must be enabledto work independently and free from pressure to ensure it can meet its objectives,including assisting the work of the external auditor. IIA Standard 1100 clearly statesthat the internal auditing activities of an organization must be independent.Independence, which refers to the audit function itself, is necessary to ensure thatthe internal auditors can be objective. Individual internal auditors are consideredobjective when they have an impartial, unbiased attitude and avoid conflicts ofinterest (IIA Standard 1120). To be independent, the internal audit function must beappropriately positioned within the company.