EXPOSURE DRAFT
STANDARD ON INTERNAL AUDIT (SIA) 360
COMMUNICATION WITH MANAGEMENT
The Internal Audit Standards Board of The Institute of Chartered Accountants of
India (ICAI) invites comments on Standard on Internal Audit (SIA) 360,
Communication with Management.
Comments are most helpful if they indicate a clear rationale and, where applicable,
provide a suggestion for alternative wording.
Comments can be e-mailed either at cia@icai.in; or at concurrentaudit@icai.in
Last date for sending comments is March 28, 2019.
This Standard on Internal Audit seeks to revise and supersede Standard on Internal Audit (SIA) 9, Communication with
Management, issued in January 2009 (in recommendatory form). This SIA is being issued in its place as a mandatory
standard from its effective date.
STANDARD ON INTERNAL AUDIT (SIA) 360
COMMUNICATION WITH MANAGEMENT
Contents
Paragraph(s)
Introduction ........................................................................................... 1
Objectives ......................... .............................................................. 2
Requirements ......................................................................................... 3
Explanatory Comments ........................................................................ 4
Effective Date ........................................................................................ 5
This Standard on Internal Audit (SIA) 360, Communication with Management, issued
by the Council of the Institute of Chartered Accountants of India should be read in
conjunction with the "Preface to the Standards on Internal Audit," "Framework
governing Internal Audits" and "Basic Principles of Internal Audit" issued by the
Institute.
1.0 INTRODUCTION
1.1 The Internal Auditor is required to have an effective two-way communication
with the management, both while managing the internal audit function, and
also while conducting an internal audit assignment. A continuous dialogue
with management, at various stages of the internal audit process, is critical to
the achievement of internal audit objectives.
1.2 Communication refers to any information exchange between the Internal
Auditor and management, either through written media or verbal means. The
focus of this Standard is on the need for quality communication required to
help execute effective internal audits.
1.3 Scope: This Standard applies to all internal audit activities and audit
assignments. The communication required for the Internal Auditor to report his
findings in the form of a formal presentation or written report is the subject
matter of another Standard (SIA 370 "Reporting Results to Management").
2.0 OBJECTIVES
2.1 The objectives of this Standard on Communication with Management are to
ensure the following:
(a) There is clarity between the Internal Auditor and the management with
regard to the scope, approach and objectives of an internal audit.
(b) To help inform, persuade and act on matters important to the conduct of
an internal audit by promoting a continuous dialogue and free flow of
information between the Internal Auditor and management.
(c) To help resolve any conflicts in a timely manner.
3.0 REQUIREMENTS
3.1 The Internal Auditor shall establish a written communication process and
protocol with management, which is shared and agreed with them. All
communication shall be clear, appropriate and in line with the agreed process
and deadlines. (Para 4.1)
3.2 The process documentation shall outline the various modes and channels of
communication (Para 4.2), the periodicity and timelines for communication
(Para 4.3), and also cover certain essential information required to be
communicated (Para 4.4). Where essential matters (Para 4.4) are concerned, any
verbal communication should subsequently be confirmed in writing and
maintained as audit documentation.
3.3 The Chief Internal Auditor (or the Engagement Partner, in case of external
service provider), shall play an active role in resolving conflicts through timely
communication with management.
4.0 EXPLANATORY COMMENTS
4.1 Communication Process and Protocol (Para 3.1): A process-based
communication will stipulate all the key elements required for accurate,
complete and timely communication. A communication protocol will clarify
who will communicate with whom during the duration of the assignment,
including escalations required for timely intervention.
4.2 Modes and Channels of communication (Para 3.2): The manner in which
information is exchanged (e.g., verbal, written, picture, video, etc.) is the mode
of communication. The medium used to exchange information (e.g., through
phone, hard-copy (paper), email, file exchange, etc.,) is the channel of
communication.
4.3 Periodicity and time-line of communication (Para 3.2): The Internal Auditor,
jointly in consultation with management, shall determine the nature and timing
of communication. It is necessary that certain matters are conveyed during, or
by a certain point in time, of the internal audit.
4.4 Essential information for communication (Para 3.2): Standards on Internal
Audit (SIA) on a particular subject also includes any information which is
considered essential for conduct of the internal audit. Such communication
requirements shall be noted for compliance in written form.
For example, para 4.3 of SIA 210 "Managing the Internal Audit Function"
mentions that "the Internal Auditor shall engage in periodic meetings with
(management) to ensure progress is on track and concerns, if any in this regard, are
addressed immediately". Similarly, para 4.3 of SIA 310 "Planning the Internal
Audit Assignment" requires a "Discussion with Management" as part of the
planning process. This exchange of information is considered important and
essential for conduct of internal audits.
4.5 Documentation: To confirm compliance of audit procedures with this SIA, the
list of documents required is as follows:
(a) Written Communication process and protocol, as part of the Internal
Audit Manual.
(b) Written details of essential exchange of information, as required by other
SIAs, cross referenced to the Internal Audit Program, where appropriate.
5.0 EFFECTIVE DATE
5.1 This Standard is applicable for internal audits beginning on or after a date to be
notified by the Council of the Institute.
|
