1. Objectivity and Impartiality
Objectivity and Impartiality are vital to the effectiveness of the internal audit function. Objectivity means an unbiased mental attitude and professionalism that allows an internal auditor to perform engagements with no quality compromises. The principle of objectivity imposes on all internal auditors the obligation to be fair and intellectually honest. Objectivity requires the auditors not to subordinate their judgment on audit matters to that of others. In the execution of an audit, the internal auditor must base his/her findings on relevant, reliable, sufficient, and timely audit evidence and a set of criteria. Such criteria include statutory policies, rules, regulations, and procedures.
Impartiality, on the other hand, means that the internal auditor is free from bias and conflict of interest. He/she does not use his/her position to acquire benefits or advantage for his/ herself or his/her related interests. In case of an actual or potential conflict of interest, he/she practices full disclosure and inhibits his/herself from participating in the decision-making process.
To be objective and impartial, the internal auditor shall at all times uphold public interest over and above personal interest. He/she shall have no direct authority or responsibility for the activities he/she reviews nor any responsibility for developing or implementing processes or systems. He/she shall not have a vested interest in the activity being audited. The internal auditor is not allowed to make the rules: he/she shall have audit performance standards that are already in place and accepted by the LGU. If the rules are developed, he/she cannot impartially evaluate the effectiveness and application of these rules
An internal audit function shall maintain an appropriate level of independence and objectiveness through sound reporting relationships, and by those involved in internal audit activities avoiding bias and conflicts of interest.
Policies and procedures shall be in place to help an internal audit ensure against the risk of bias, particularly arising from perceived familiarity by virtue of long association with persons who are the subject of any internal audit activity.
An internal auditor or person responsible for internal audit shall have a process in place to ensure that:
- Internal auditor does not undertake audit work regarding operations / services for which he/she has held responsibility; and
- Internal auditors may be rotated whenever it is practical and necessary to do so; alternatively, some other method is put in place to address the risks associated with having the same auditors responsible for auditing the same unit/functional area over a prolonged period.
2. Authority and Confidentiality
Based on the audit objectives and subject to compliance with the internal security policies of public service organizations, the LCE shall authorize internal auditors to have full, free, and unrestricted access to all functions, premises, assets, personnel, records, and other documents and information that the Head of Internal Audit (HoIA) considers necessary in undertaking internal audit activities. Objectivity & Impartiality Authority & Confidentiality Professional Competence
The internal auditor shall respect the confidentiality of information acquired in the course of performing the audit activities. Unless there is a legal or professional right or duty to disclose, the Internal Auditor shall not use or disclose any such information without proper and specific authority. Likewise, confidentiality is not only a matter of disclosure of information but includes the prohibition on the use information for personal advantage or for the advantage of a third party.
The HoIA and the individual internal audit staff are responsible and accountable for maintaining the confidentiality of the information they receive during the course of their work.
3. Professional Competence
The internal auditor shall maintain high standards of competence and the highest degree of professional integrity, both in the technical and ethical sense, commensurate with his/her responsibilities and mandated functions. He/she must possess and continually develop the knowledge, skills, and other competencies needed to perform their responsibilities to enhance the quality of the audit.”