OVERVIEW OF INTERNAL AUDITINGHistory of Internal AuditingAncient TimesSystem of authorisation & verification by the Egyptian, Chinese and PersiansMiddle AgesExpansion of the Italian commerce with better record keeping ( double entry )Industrial RevolutionScrutinizing records with documentary evidenceRecent TimesAccountability to investorsB/S audit & analytical approach to accounts

DEFINITION OF INTERNAL AUDITINGOld definitionStandards of Professional Practice of Internal Auditor:Independent appraisal function established within an organisation to examine & evaluate its activities as a service to the organisation

Modern Internal AuditingA systematic, objective appraisal by Internal Auditor of the diverse operations & controls within an organisation to determine whether:Financial and operating information is accurate & reliable

DEFINITION OF INTERNAL AUDITING - continuationExternal regulations & acceptable internal policies & procedures are followedRisks to enterprise are identified & minimisedSatisfactory operating criteria are metResources are used efficiently & economicallyOrganization objectives are effectively achievedall for the purpose of assisting members of the organization in the effective discharge of responsibility

New Definition of Internal AuditInternal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization operations. It helps an orgn accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk mgt, control and governance processes.

DIFFERENT APPROACHES TO INTERNAL AUDITINGComparative auditingEncompass the audits of all activities within a government entityManagement oriented auditingreviewing all activities within the entity in order to help managers to manage betterParticipative auditingEnlisting the aid of auditee in gathering data, evaluating operation and correcting problemsProgram auditingReviewing of entire programs for determining whether desired benefits are achieved

DIFFERENCES BETWEEN INTERNAL & EXTERNAL AUDITOROrganisations employeeServing organisations needsFocuses on future eventsDirectly concerned with prevention of fraudIndependent of audited activitiesContinuous review of activitiesIndependent contractorServing 3rd partiesFocuses on historical eventsIndirectly concerned with prevention & detection of fraud Independent of management and BODPeriodic review of financial statementsInternal AuditorExternal Auditor

EVOLUTION OF INTERNAL AUDITINGAttesting accuracy of financial matters

Junior to independent accounting profession

Act as an auditees adversaryExamination & appraisal of both controls of public & private entitiesDistinctive discipline

Act as a guide to operationsPreviousCurrent

THE INSTITUTE OF INTERNAL AUDITORSMission: to be the primary international professional association, organized on a worldwide basis, dedicated to the promotion and development of the practice of internal auditing.Commitment:Providing on an international scale, comprehensive professional development activities, standards for the practice of internal auditing & certification.Researching, disseminating & promoting to its members & to the public throughout the world, knowledge & information concerning internal auditing, internal control & related subjects

THE INSTITUTE OF INTERNAL AUDITORS - continuationEstablishing meetings worldwide in order to educate members & others as to the practice of internal auditing as it exists in various countries throughout the world

Bringing together internal auditors from all countries to share information, experiences in internal auditing and promotion education in the field of internal auditing