This guide is intended to assist public sector organisations to identify, and apply, better practice principles and practices that are tailored to particular circumstances.
Integrity, transparency and accountability remain at the centre of good public sector governance and it is important for public sector agencies to make appropriate investments in systems and activities that support effective management.
In this context, better practice entities consider an appropriate level of investment in internal audit to be an important business decision. These entities recognise that a well‑resourced and effective internal audit function can play a key role in their governance arrangements. By providing assurance on the effectiveness of an entity’s internal control environment and identifying opportunities for performance improvement, internal audit can make a valuable contribution to achieving an entity’s objectives and to managing the entity’s risks.
The responsibilities of internal audit vary considerably across public sector entities, as do internal audit organisational arrangements and the way internal audit services are delivered. This is to be expected, given the nature, size and complexity of the public sector. However, as this guide highlights, there are a range of key elements of better practice that all internal audit functions should demonstrate. These include operational independence, appropriate positioning within an entity’s governance framework and a close alignment of the internal audit program to the entity’s objectives and risks.
This guide replaces the guide issued by the ANAO in 2007. While many of the principles remain the same, the role of internal audit has continued to evolve over time. Internal audit and Audit Committees both play important roles in the good governance of public sector agencies.
Accordingly, this guide complements the ANAO’s Better Practice Guide—Public Sector Audit Committees issued in September 2011. The guide, which has a public sector orientation, is intended to be a reference document for chief Executives, Boards, members of Audit Committees, managers with responsibility for internal audit activities, and internal audit staff. As with all ANAO Better Practice Guides, each entity is encouraged to use the guide to identify, and apply, better practice principles and practices that are tailored to its particular circumstances