The internal audit charter is a formal document that outlines the purpose, authority, and responsibility of the internal audit activity. It includes the functional and administrative reporting lines for the chief audit executive, which helps define the independence and objectivity of the internal audit function. This charter is crucial as it also establishes the framework within which the internal audit team operates, ensuring alignment with organizational goals and governance frameworks.References: The Institute of Internal Auditors (IIA) - International Professional Practices Framework (IPPF)

Section: Volume E

Due professional care requires internal auditors to understand the engagement objectives and scope fully, ensuring their work is thorough and appropriate for the given situation. It involves exercising appropriate diligence and professionalism during audits. References:
* IIA Standard 1220: Due Professional Care.
* IIA Practice Guide: Demonstrating Due Professional Care.

Demonstrating due professional care involves ensuring that the internal audit activity follows established guidelines and standards for conducting audit engagements. By establishing internal audit manuals, an audit lead provides a structured approach and standardized procedures for the internal audit activity, which helps in maintaining consistency, quality, and adherence to professional standards. This practice exemplifies the application of due professional care by promoting thorough and well-documented audit processes.
References:
* The IIA Standards: Standard 1220 - Due Professional Care: "Internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor. Due professional care does not imply infallibility."
* IIA Practice Guide: "Quality Assurance and Improvement Program": Highlights the importance of internal audit manuals and procedures in maintaining due professional care.