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Internal audit charter

Purpose and mission

The purpose of Pension Insurance Corporation’s (PIC) internal audit (IA) function is to provide independent, objective assurance and consulting services designed to add value and improve PIC’s operations. The mission of PIC IA is to enhance and protect organisational value by providing risk-based and objective assurance, advice, and insight. The IA function helps PIC accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes.

Standards for the Professional Practice of Internal Auditing

The IA function will govern itself by adherence to the mandatory elements of The Institute of Internal Auditors' International Professional Practices Framework, including the Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, the International Standards for the Professional Practice of Internal Auditing, and the Definition of Internal Auditing. The Chief Internal Audit Officer will report periodically to PIC senior management, Board and Audit Committee regarding the IA function’s conformance to the Code of Ethics and the Standards.


The Chief Internal Audit Officer (CIAO) will report functionally to the PIC Board and Audit Committee and administratively (i.e., day-to-day operations) to the PIC Chief Executive Officer. To establish, maintain, and assure that PIC’s IA function has sufficient authority to fulfil its duties, the PIC Board and Audit Committee will:

  • approve the IA’s charter
  • approve the risk-based internal audit plan
  • approve the internal audit function’s budget and resource plan
  • receive communications from the CIAO on the IA function’s performance relative to its plan and other matters
  • approve decisions regarding the appointment and removal of the CIAO
  • recommend for approval by the Remuneration Committee the remuneration of the CIAO
  • make appropriate inquiries of management and the CIAO to determine whether there is inappropriate scope or resource limitations

The CIAO will have unrestricted access to, and communicate and interact directly with, the PIC Board and Audit Committee, including in private meetings without management present.

The PIC Board and Audit Committee authorises the IA function to:

  • have full, free, and unrestricted access to all functions, records, property, and personnel pertinent to carrying out any engagement, subject to accountability for confidentiality and safeguarding of records and information
  • allocate resources, set frequencies, select subjects, determine scopes of work, apply techniques required to accomplish audit objectives, and issue reports
  • obtain assistance from the necessary personnel of PIC, as well as other specialised services from within or outside PIC, in order to complete the engagement

Independence and objectivity

The CIAO will ensure that the IA function remains free from all conditions that threaten the ability of internal auditors to carry out their responsibilities in an unbiased manner, including matters of audit selection, scope, procedures, frequency, timing, and report content. If the CIAO determines that independence or objectivity may be impaired in fact or appearance, the details of impairment will be disclosed to appropriate parties.

Internal auditors will maintain an unbiased mental attitude that allows them to perform engagements objectively and in such a manner that they believe in their work product, that no quality compromises are made, and that they do not subordinate their judgment on audit matters to others.

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

  • assessing specific operations for which they had responsibility within the previous year
  • performing any operational duties for PIC or its affiliates
  • initiating or approving transactions external to the IA function
  • directing the activities of any PIC employee not employed by the IA function, except to the extent that such employees have been appropriately assigned to auditing teams or to otherwise assist internal auditors

Where the CIAO has or is expected to have roles and/or responsibilities that fall outside of internal auditing, safeguards will be established to limit impairments to independence or objectivity.

Internal auditors will:

  • disclose any impairment of independence or objectivity, in fact or appearance, to appropriate parties
  • exhibit professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined
  • make balanced assessments of all available and relevant facts and circumstances
  • take necessary precautions to avoid being unduly influenced by their own interests or by others in forming judgments

The CIAO will confirm to the PIC Board and Audit Committee, at least annually, the organisational independence of the IA function.

The CIAO will disclose to the PIC Board and/or Audit Committee any interference and related implications in determining the scope of internal auditing, performing work, and/or communicating results. 

Scope of internal audit activities

The scope of internal audit activities encompasses, but is not limited to, objective examinations of evidence for the purpose of providing independent assessments to the PIC Board and Audit Committee, management, and outside parties on the adequacy and effectiveness of governance, risk management, and control processes for PIC. Internal audit assessments include evaluating whether: 

  • risks relating to the achievement of PIC’s strategic objectives are appropriately identified and managed
  • the actions of PIC’s officers, directors, employees, and contractors are in compliance with PIC’s policies, procedures, and applicable laws, regulations, and governance standards
  • the results of operations or programs are consistent with established goals and objectives
  • operations or programs are being carried out effectively and efficiently
  • established processes and systems enable compliance with the policies, procedures, laws, and regulations that could significantly impact PIC
  • information and the means used to identify, measure, analyse, classify, and report such information are reliable and have integrity
  • resources and assets are acquired economically, used efficiently, and protected adequately

The CIAO will report periodically to senior management and the PIC Board and Audit Committee regarding:

  • the internal audit function’s purpose, authority, and responsibility
  • the internal audit function’s plan and performance relative to its plan
  • the internal audit function’s conformance with The IIA’s Code of Ethics and Standards, and action plans to address any significant conformance issues
  • significant risk exposures and control issues, including fraud risks, governance issues, and other matters requiring the attention of, or requested by, the PIC Board and Audit Committee
  • results of audit engagements or other activities
  • resource requirements
  • any response to risk by management that may be unacceptable to PIC

The CIAO also coordinates activities, where possible, and considers relying upon the work of other internal and external assurance and consulting service providers as needed. The IA function may perform advisory and related client service activities, the nature and scope of which will be agreed with the client, provided the IA function does not assume management responsibility.

Opportunities for improving the efficiency of governance, risk management, and control processes may be identified during engagements. These opportunities will be communicated to the appropriate level of management.


The CIAO has the responsibility to: 

  • submit, at least annually, to senior management and the PIC Board and Audit Committee a risk-based internal audit plan for review and approval
  • communicate to senior management and the PIC Board and Audit Committee the impact of resource limitations on the internal audit plan
  • review and adjust the internal audit plan, as necessary, in response to changes in PIC’s business, risks, operations, programmes, systems, and controls
  • communicate to senior management and the PIC Board and Audit Committee any significant interim changes to the internal audit plan
  • ensure each engagement of the internal audit plan is executed, including the establishment of objectives and scope, the assignment of appropriate and adequately supervised resources, the documentation of work programs and testing results, and the communication of engagement results with applicable conclusions and recommendations to appropriate parties
  • follow up on engagement findings and corrective actions, and report periodically to senior management and the PIC Board and Audit Committee any corrective actions not effectively implemented
  • ensure the principles of integrity, objectivity, confidentiality, and competency are applied and upheld
  • ensure the IA function collectively possesses or obtains the knowledge, skills, and other competencies needed to meet the requirements of the internal audit charter
  • ensure trends and emerging issues that could impact PIC are considered and communicated to senior management and the PIC Board and Audit Committee as appropriate
  • ensure emerging trends and successful practices in internal auditing are considered
  • establish and ensure adherence to policies and procedures designed to guide the IA function
  • ensure adherence to PIC’s relevant policies and procedures, unless such policies and procedures conflict with the internal audit charter. Any such conflicts will be resolved or otherwise communicated to senior management and the PIC Board and Audit Committee
  • ensure conformance of the IA function with the Standards, with the following qualifications:
        (i)  If the IA function is prohibited by law or regulation from conformance with certain parts of the Standards, the CIAO will ensure appropriate disclosures and will ensure conformance with all other parts of the Standards
        (ii)  If the Standards are used in conjunction with requirements issued by relevant regulators, the CIAO will ensure that the IA function conforms with the Standards, even if the IA function also conforms with the more restrictive requirements of relevant regulators

Quality assurance and improvement programme

The IA function will maintain a quality assurance and improvement programme that covers all aspects of the IA function. The program will include an evaluation of the internal audit function’s conformance with the Standards and an evaluation of whether internal auditors apply The IIA’s Code of Ethics. The program will also assess the efficiency and effectiveness of the IA function and identify opportunities for improvement.

The CIAO will communicate to senior management and the PIC Board and Audit Committee on the internal audit function’s quality assurance and improvement programme, including results of internal assessments (both ongoing and periodic) and external assessments conducted at least once every five years by a qualified, independent assessor or assessment team from outside PIC. 


Name Designation
Valeria Locatelli Chief Internal Audit Officer
Tracy Blackwell Chief Executive Officer
Roger Marshall Audit Committee Chair

Content reviewed and approved by the Audit Committee: 26/09/2023 

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