AUDITING

Auditing



Auditing

Part A

Introduction

Internal audit is an appraisal undertaking which is established as a service to the organisation. The IIA characterises the new internal Auditing explanation as "an unaligned, target assurance and conferring undertaking conceived to add value and improve an organisation's operations. It helps an organisation complete its objectives by conveying a methodical, well controlled approach to assess and advance the effectiveness of risk administration, control, and governance processes." (IIA, 1999) .This definition identifies that supplying promise services to management is broader than the more customary notion of appraisal and that today's internal auditors often assist to better administration by providing an internal conferring resource. They also add value by promoting a wide scope for internal auditing and ensuring a high reporting level to the audit committee/the board - accords with the needs of well managed organisations. The definition recognises that controls should be focused on mitigating risk and acknowledges the important role of the internal auditor in contributing to good governance.

Internal Auditing function and Scope

The function of interior audit is ever-changing. The demands on all organisations to 'add-value', and to strengthen internal governance, have led to a significant shift in management expectations of internal audit role within the organisation. The interior auditor should be an individual of high intellect with consideration for humanity. With these features, the interior auditor who arrives at unbalanced components can offer remedial outlooks for lifting the institution or the business to a balanced state. The audit Role is a reflection of the needs and expectations of the organisation as a whole to survive and thrive at a particular phase in development.

The overall objective of internal audit is to act as a Consultant at all levels of management including cost centres in the effective discharge of its responsibilities by providing independent and confidential analysis, appraisal, advice and recommendations concerning the activities of appraising the relevance, reliability and integrity of management, financial and operating data and reports. They also review the systems established to ensure the organisation compliance with those policies, plans, procedures, statutory requirements and regulations which could have a significant impact on operations. The Internal Audit function provides independent oversight of the effectiveness of, and adherence to, the institution's organisational and procedural controls. It also oversees the effectiveness of, and adherence to, the institution's compliance and risk management policies and practices. The establishment and development of internal audit plays a vital role in the improvement of internal control and management of departments, enterprises and undertakings. When exercising control over departments the top management needs internal audit to be independent in the collection, management, allocation and utilization of administrative and operating funds. Internal audit focuses on overall supervision over the truthfulness, compliance and effectiveness to examine the truthfulness, compliance and effectiveness of revenues and expenditures of the organisation and their respective departments for the purpose of ensuring that such department's undertakings will operate in a clean and efficient manner with regards to the revenues and expenditures, examination of accounts and other relevant information of enterprises and ...