About

We want to be your collaborative partner and trusted advisor when it comes to:

  • Audit and assurance services
  • Advisory and consulting services
  • Risk assessment and risk management

You can count on us to provide independent appraisals of your financial, operational, information technology, and control activities.

Want to request our assistance with an operational issue or learn more about how we can help you? Contact us or keep reading for our full charter.

Internal Audit reports directly to the IU president, through the Office of the Vice President and General Counsel, and to the Board of Trustees.

Indiana University Internal Audit Charter

August 12, 2016

The mission of IU Internal Audit is to provide independent and objective assurance and consulting services for Indiana University (“IU” or “the university”) including IU management (“Management”) and the Board of Trustees of Indiana University (the “Board”). Internal Audit assists the university in accomplishing its mission and priorities by bringing a systematic, disciplined, and value-added approach to evaluate and improve the effectiveness of the university’s governance structures, risk management processes, and internal controls by providing independent appraisals of the university’s financial, operational, information technology, and control activities.

The core values by which Internal Audit will seek to achieve its mission and support the university’s mission and principles of excellence include:

  • Professional Service: Internal Audit will provide timely, high-quality, value-added service in a manner that fosters collaboration and treats clients and colleagues with respect.
  • Compliance: Internal Audit will adhere to all applicable laws and regulations, comply with the Institute of Internal Auditors (“IIA”) standards and code of ethics, and comply with all Indiana University policies.
  • Integrity: Internal Audit will always strive to do the right thing for the right reason; communicate in an honest, direct, and transparent manner; be accountable, trustworthy, and engaged team members; and earn and maintain the trust of the university community.
  • Excellence: Internal Audit will demonstrate a commitment to professional excellence, maintain high professional standards through continuing professional development, be a results-focused organization. Internal Audit team members will exercise initiative in providing solutions and generating insights for our clients.
  • Intentionality: Internal Audit will be intentional about our work by planning, analyzing, evaluating, measuring, deliberating, adjusting, and then moving forward. Internal Audit will be intentional about our people by mentoring, training, developing, and encouraging personal and professional growth.

The internal audit activity is established by the Finance, Audit, and Strategic Planning Committee of the Board. Internal Audit responsibilities are defined by the Board as part of their oversight role.

Internal Audit, with strict accountability for confidentiality and safeguarding records and information, is authorized full, free, and unrestricted access to any and all of the university’s information, records, systems, physical properties, and personnel pertinent to carrying out any engagement. All relevant university employees are required to assist IUIA in fulfilling its roles and responsibilities. Internal Audit will also have free and unrestricted access to senior management and the Board.

IU Internal Audit will govern itself by adherence to the Institute of Internal Auditors’ mandatory guidance including the Definition of Internal Auditing, the Code of Ethics, and the International Standards for the Professional Practice of Internal Auditing (Standards). This mandatory guidance constitutes principles of the fundamental requirements for the professional practice of internal auditing and for evaluating the effectiveness of the internal audit activity’s performance. In addition, Internal Audit will adhere to the university’s relevant policies and procedures and Internal Audit’s standard operating procedures manual.

The Associate Vice President and Chief Audit Officer (“AVP and CAO”) will report functionally to the Board and administratively (i.e., day-to-day operations) to the Vice President and General Counsel. The Board will:

  1. Approve the internal audit charter.
  2. Review the risk-based internal audit plan and the internal audit budget and resource plan.
  3. Receive communications from the AVP and CAO on IU Internal Audit’s performance relative to its plan and other matters.
  4. Approve decisions regarding the appointment and removal of the AVP and CAO.
  5. Make appropriate inquiries of management and the AVP and CAO to determine whether there is inappropriate scope or resource limitations.

The AVP and CAO will communicate and interact directly with the Board, including in executive sessions and between Board meetings as appropriate.

Internal Audit will remain free to conduct assurance and consulting services, including matters of audit selection, scope, procedures, frequency, timing, or report content, in a manner that maintains independent and objective mental attitude.

Internal auditors will have no direct operational responsibility or authority over any of the activities audited. Accordingly, they will not implement internal controls, approve policies, develop procedures, install systems, prepare records, or engage in any other activity that may impair the internal auditor’s judgment.

Internal auditors will exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors will make a balanced assessment of all the relevant circumstances and not be unduly influenced by their own interests or by others in forming judgments.

The AVP and CAO will confirm to the Board, at least annually, the organizational independence of the internal audit activity.

The scope of internal auditing encompasses, but is not limited to, the examination and evaluation of the adequacy and effectiveness of the organization’s governance, risk management, and internal controls as well as the quality of performance in carrying out assigned responsibilities to achieve the organization’s stated goals and objectives. This includes:

  1. Evaluating risk exposure relating to achievement of the university’s strategic objectives.
  2. Evaluating the reliability and integrity of information and the means used to identify, measure, classify, and report such information.
  3. Evaluating the systems established to ensure compliance with those policies, plans, procedures, laws, and regulations which could have a significant impact on the university.
  4. Evaluating the means of safeguarding university assets and, as appropriate, verifying the existence of such assets.
  5. Evaluating the effectiveness and efficiency with which resources are employed.
  6. Evaluating operations or programs to ascertain whether results are consistent with established objectives and goals.
  7. Evaluating governance processes.
  8. Evaluating the effectiveness of the risk management processes.
  9. Reporting periodically on Internal Audit’s purpose, authority, responsibility, and performance relative to its plan.
  10. Reporting significant risk exposures and control issues, including fraud risks, governance issues, and other matters needed or requested by the Board.
  11. Administering the whistleblower hotline policy and reporting website, which includes coordinating the investigation of all reports submitted in a timely and discreet manner.

At least annually, the AVP and CAO will submit to senior management and the Board an internal audit plan for review and approval. The internal audit plan will consist of a work schedule as well as budget and resource requirements for the next fiscal year. The AVP and CAO will communicate the impact of resource limitations and significant interim changes to senior management and the Board.

The internal audit plan will be developed based on a prioritization of the audit universe using a risk-based methodology, including input of senior management and the Board. The AVP and CAO will review and adjust the plan, as necessary, in response to changes in the organization’s business, risks, operations, programs, systems, senior leadership, and controls. Any significant deviation from the approved internal audit plan will be communicated to senior management and the Board through periodic activity reports.

A written report will be prepared and issued by the AVP and CAO or designee following the conclusion of each internal audit engagement and will be distributed as appropriate. Internal audit results will also be communicated to the Board. The internal audit report will include the client/management’s response and action plans taken or to be taken in regard to the specific findings and recommendations. Management’s response should include a timetable for anticipated completion of action to be taken and an explanation for any corrective action that will not be implemented.

Internal Audit will be responsible for appropriate follow-up on engagement findings and recommendations. All significant findings will remain in an open issues file until cleared.

The AVP and CAO will periodically report to senior management and the Board on Internal Audit’s performance relative to its plan. Reporting will also include significant risk exposures and control issues, including fraud risks, governance issues, and other matters needed or requested by senior management and the Board. The AVP and CAO will also report on instances of fraud or fiscal misconduct that may have a material financial, compliance, or reputational impact on the university.

IU Internal Audit will maintain a quality assurance and improvement program that covers all aspects of the internal audit activity. The program will include an evaluation of the internal audit activity’s conformance with the Definition of Internal Auditing and the Standards and an evaluation of whether internal auditors apply the Code of Ethics. The program also assesses the efficiency and effectiveness of the internal audit activity and identifies opportunities for improvement.

The AVP and CAO will communicate to senior management and the Board on the quality assurance and improvement program, including results of ongoing internal assessments and external assessments conducted at least every five years.

The IU Internal Audit Charter is hereby approved by the Board of Trustees this 12th day of August, in the year 2016.

How we develop the university’s audit plan

Internal Audit develops an annual risk-based audit plan that is monitored on a continual basis throughout the year. The risk assessment process is driven by input received from senior university and campus-level management, the Board of Trustees, and peer institutions. It is supplemented by ongoing monitoring of high-profile events and industry trends that affect higher education.

The plan is adjusted, modified, and re-prioritized as necessary in response to changes in the university’s programs, business activities, risk profile, IT systems, senior leadership, and internal control structures. Significant changes to the plan are communicated to senior management and the Board.

Specific risk factors that are considered include:

  • The university’s reputation
  • Financial stability
  • Information security and privacy
  • Significant operational change
  • New or complex technologies
  • Size and complexity of operations
  • Past audit history

Certification

IU’s Internal Audit department has completed the COSO Internal Control Certification Program sponsored by the Committee on Sponsoring Organizations.

Learn more about COSO certification