THE REVIEW OF THE EFFECTIVENESS OF THE SYSTEM OF INTERNAL AUDIT st1. Legislative changes from 1 April 2006 Regulation 4 of the Accounts and Audit Regulations (2003) (‘the Regulations’) was amended in 2006 (SI564/2006) with new reporting requirements, applicable to local authorities in England, on the effectiveness of the system of internal audit. The Regulations came into force on 1 April 2006 and applied for the 2006/07 reporting year. From 2007/08, the new reporting requirements have been included in the Annual Governance Statement (‘AGS’). 2. Existing related guidance on the Accounts and Audit Regulations 2003 The Department for Communities and Local Government (‘CLG’) issued guidance on the amended Regulations in August 2006. This Guidance covers the significant changes made to the 2003 Regulations. Apart from simplifying and streamlining the 2003 regulations, the changes were intended to strengthen governance and accountability through a new requirement to carry out and consider the findings of a review of the effectiveness of the system of internal audit in Regulations 6 (3) and 6 (4) of the amended 2003 Regulations. The Guidance on the new requirements relating to the review of the effectiveness of the system internal audit (Regulation 6) states: “Regulation 6 of the 2003 Regulations was amended in 2006 to require relevant bodies to conduct an annual review of the effectiveness of its system of internal audit and for a committee ...