Sec. 1 Purpose
An effective internal audit program strengthens an organization’s ability to create, protect, and sustain value by providing the board and management with independent, risk-based, and objective assurance, advice, insight, and foresight.
Sec. 2 Ethics and Professionalism
Internal Audit (IA) professionals at U.T. System Administration and the U.T. institutions shall be guided by the following principles:
a) Integrity – demonstrate integrity in their work and behavior.
b) Objectivity – maintain an impartial and unbiased attitude when performing IA services and making decisions.
c) Competency – apply the knowledge, skills, and abilities to fulfill their roles and responsibilities successfully.
d) Due Professional Care – apply due professional care in planning and performing IA services.
e) Confidentiality – use and protect information appropriately.
Sec. 3 Governance and Structure
IA effectiveness is ensured and supported by appropriate governance and structure:
a) Authorization – the Board establishes, approves, and supports the mandate of the IA function.
b) Organizational Position – the Board establishes and protects the IA function’s independence and qualifications.
c) Oversight:
i) Functional Oversight – the U.T. System Board of Regents’ Audit, Compliance, and Risk Management Committee (ACRMC) and institutional audit committees provide strategic oversight and direction of all IA activities.
ii) Institutional Oversight – the presidents manage the operational and administrative matters of IA, including performance evaluation of the chief audit executives. Employment and termination of the chief audit executive by the president must have concurrence from the ACRMC Chairman.
iii) Professional Oversight – the U.T. System Chief Audit Executive provides oversight and support related to conformance with professional standards, promulgates guidance to ensure a consistent, Systemwide approach to internal audit activities, and provides advice to the ACRMC Chairman during employment and termination decisions of institutional chief audit executives.
Sec. 4 Internal Audit Guidance
Consistent with Texas Government Code, Chapter 2102 (Texas Internal Auditing Act), Regents’ Rule 20401 (Sec. 1.2) outlines the charge from the ACRMC and Chancellor to the U.T. System Chief Audit Executive for ensuring an effective internal audit function is in place Systemwide. This includes conformance with the Global Internal Audit Standards (Standards) promulgated by The Institute of Internal Auditors. The Standards provide guidance for managing and performing IA services. This includes methodologies for risk assessments and audit plans, internal audit work papers, reporting, resources, and quality assurance and improvement. Such standards, methodologies, and approaches for implementation will be developed collaboratively with chief audit executives, sensitive to essential areas requiring clear conformance and other areas where flexibility is appropriate given the diversity of the institutions. This also includes coordination of administrative items. The guidance will be maintained in an online format, accessible to all U.T. System institutional auditors.
Definitions
Internal Audit – independent functions at U.T. System Administration and each U.T. institution that provide independent, risk-based, and objective assurance, advice, insight, and foresight designed to strengthen the organization.
