Internal Audit
C. P. Mansoor S. AhmedM. Com, PGDBA
Internal Audit
Not confined to Independent Audit Systematic Examination of
Records Procedures Systems Operations
Definition
“Internal Auditing is an independent and an objective assurance and consulting activity designed to add value and improve an organization’s operation. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control & governance process.” IIA USA
Scope of Internal Audit
Risk Management & Control Reliability & Integrity of Financial & Operational Information Compliance with Laws, Regulations & Contracts Safeguarding the Assets Effectiveness & Efficiency of Operations Accomplishments of Objectives & Goals for operation
Governance Promoting Values & Ethics Effective Organizational Performance Management &
Accountability Effectively Communicating Risk & Control Information to
appropriate areas of organization Effectively co-ordinating the activities of and communicating
information among the board, external & internal auditor and management.
Need for Internal Auditing
Growth Size Operation Location
Specialists Records Procedures Systems Operations
Operation of INTERNAL AUDIT
Purpose, Authority and Responsibility Planning Policies and Procedures Personal Management and
Development External Auditors Quality Assurance
Professional Proficiency of Internal Audit Department
Staffing Knowledge, Skills and Disciplines Supervision
Performing Audit Work
Planning the Audit Examining & Evaluating Information Communication Results Appropriate Follow-up Preparation of Audit Reports Discussion and Follow-up of Reports Reporting to Top Management
Code of Ethics for Internal Auditors
•Honest, Diligent, ResponsibleIntegrity•Nothing that conflicts with the interest of the organizationObjectivity
•Mis-use of informationConfidentiality
•Subjected to professional expectancyCompetency