Sample Internal Audit Charter for

Credit Unions
June 2013

1. Statement of Policy
It is the policy of the Board that Any Credit Union Limited maintains strong systems of risk management
and internal control for maintaining accounting records, safeguarding assets and detecting fraud or other
irregularities thereby ensuring, as far as it is practical, that the objectives of Any Credit Union Limited are
achieved and that applicable law is complied with.

In support of the above objective the Board will ensure Any Credit Union Limited has access to high quality
Internal Audit services that meet international standards.

2. Mission of Internal Audit

The mission of Internal Audit is to ensure that Any Credit Union Limiteds operations are conducted
according to the highest standards by providing an independent, objective assurance function and by
advising best practice. Through a systematic and disciplined approach, Internal Audit helps Any Credit
Union Limited accomplish its objectives by evaluating and improving the effectiveness of risk
management, control and governance processes.

3. Scope
The scope of internal audit work includes the review of risk management procedures, internal control
systems, information systems and governance processes. Work will be prioritised according to risk, the
judgement of the Internal Auditor, requests from senior management and the direction of the Board
(Audit/Finance/Risk Committee). Audits may range from periodic testing of transactions, best practice
reviews, special investigations, appraisals of regulatory requirements to operational reviews and the
detection of fraud.

To fulfil its responsibilities, Internal Audit shall:

Identify and access potential risks to Any Credit Union Limiteds operations
Review the adequacy of controls established to ensure compliance with policies, plans, procedures
and business objectives
Assess the reliability and security of financial and management information and the systems and
operations that produce this information
Assess the means of safeguarding assets
Review established procedures and systems and propose improvements
Appraise the use of resources with regard to economy, efficiency and effectiveness
Carry out ad hoc appraisals, investigations, or reviews requested by management
Follow up on previous recommendations to make sure that effective remedial action is taken

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4. Authority and Access

The Internal Audit service derives its authority from the Board (through the Audit/Risk/Finance Committee
where appropriate). Internal Audit is responsible to the Board (Audit/Risk/Finance Committee) while
reporting operationally to the senior management of Any Credit Union Limited. Internal Audit aims to
promote effective controls at a reasonable cost. To achieve this, internal audit is authorised, in the course
of its activities, to:
Have access to, or make enquiry into, all of the Any Credit Union Limiteds records, information and
assets which it considers necessary for the performance of its functions.
Require all members of staff and management to supply such information and explanations as may be
needed within a reasonable period of time
Have direct access to the Chair of the Audit/Risk/Finance Committee in the performance of
professional duties (where such committees exist). The Internal Auditor shall have access to the Board,
(through the Audit/Risk/Finance Committee where appropriate).

There shall be no operational areas or levels within the Any Credit Union Limited precluded from internal
audit review.

5. Independence, Role and Responsibilities

Internal Audit is an independent and objective assurance and consulting function. It is charged with
bringing a systematic and disciplined approach to evaluating and improving the effectiveness of risk
management, controls and governance processes within Any Credit Union Limited) as a service to the
Board and all levels of management.

Independence is essential in ensuring the effectiveness of the internal audit programme. Internal Audits
independence is assured by it being carried out by professionally qualified resources external to the staff
of Any Credit Union Limited.

Internal Audit shall prepare, in liaison with the senior management, an internal audit plan. The plan shall
be based on a risk model that identifies business risks, and on inputs from management.

The plan shall first be presented to senior management for their consideration. The plan will then be
presented to the Board/ (Audit/Risk/Finance Committee) for approval. Where circumstances or the risk
profile of Any Credit Union Limited change, the Board/(Audit/Risk/Finance Committee) may make
adjustments to the plan. Internal Audit is responsible for planning, conducting, reporting and following up
on audit projects included in the audit plan. The Board/ (Audit/Risk/Finance Committee) decides on the
scope and timing of audits.

Internal Audit fieldwork shall be conducted in a professional and timely manner and to a standard
consistent with the Standards for the Professional Practice of Internal Auditors, published by the Institute of
Internal Auditors. Internal Audit in performing its work shall keep comprehensive records of activity
showing that the work has been performed in accordance with accepted standards of best practice. A
detailed audit report will summarise the objectives and scope of the audit as well as observations and
recommendations. Reporting of results will include an open process to agree the facts and the validity of
audit recommendations with senior management. To ensure objectivity and independence Internal Audit
staff should be free from all operating responsibilities. Implementation of internal audit recommendations
will be the responsibility of management. In all cases, follow up work will be undertaken to ensure
adequate actions have been taken in respect of audit recommendations.

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6. Review and Approval of the Internal Audit Charter
This Internal Audit Charter will be subject to periodic review. At a minimum this Internal Audit Charter will
be reviewed once every 3 years.

Approved by Board of Directors/Audit/Risk/Finance Committee on xx/xx/201x.

Signed: Signed:

Chair of the Board of Member of the Board of Directors/Audit

DirectorsAudit/Risk/Finance Committee Audit/Risk/Finance Committee

Date: Date:

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This publication is intended only as a general guide and should not be used as a substitute for professional advice.

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