The Institute of Internal Auditors (IIA) released its revised Global Internal Audit Standards on January 9, 2024. Although these standards are set to become effective in January 2025, organizations are required to make a few important decisions regarding their implementation strategies and compliance with the Quality Assurance Review (QAR) requirements.
When should you implement the new Standards?
The decisions on when to implement the new Standards present a bit of a challenge. While immediate implementation seems like a logical decision, practical considerations are looming. Many organizations are already contending with hectic calendars – aligning existing procedures with the new Standards, identifying potential gaps and implementing remediation procedures call for a careful assessment. The timeline for organizations to demonstrate conformity to the new Standards through a QAR post-implementation is also a crucial factor. Without adequate samples sizes, QAR assessors may find it challenging to form a conclusive opinion on conformity, and organizations must allow an adequate amount of time before going through with the review.
Realistically, organizations are advised to complete the implementation of the new Standards at least one year before their next scheduled QAR. For larger internal audit departments that are actively completing audits on a frequent basis, the timeline might be further condensed to six months prior to the next QAR. However, organizations that have recently completed a QAR can enjoy a more flexible timeline. Although starting the implementation in the coming year is recommended, those not due for a QAR can afford to delay the process a bit longer.
What if my QAR is this year or next?
For organizations anticipating a QAR in the years 2024 or 2025, a strategic approach involves completing the review before January 2025. Demonstrating conformity under the existing Standards, which still apply until the new Standards take effect, proves to be a process with smoother sailing. Even if this departure from the usual cycle is necessary, completing the QAR in 2024 resets the 5-year clock, effectively extending the timeline until the next QAR is due in 2029, providing organizations with a generous runway from the transition.
Additional considerations
While the final decisions rest with each organization, we recommend considering completing the QAR this year under the current Standards. This approach ensures a more seamless demonstration of conformity and resets the clock, affording organizations additional time to navigate the transition.
For those actively seeking QAR options, talk to the Sikich QAR taskforce. Utilizing our proprietary framework, IAEdge™, which combines the traditional QAR with a maturity assessment leveraging the Internal Audit Capability Model (IA-CM), ensures not only meeting Standards but also providing valuable insights and a strategic roadmap for your organization’s success. IAEdge™ allows organizations to make informed decisions about advancements or optimizations while updating procedures to align with the Standards.
