Internal audit

Question 1

Internal audit is

Answer 1

an independent, objective assurance and consulting
activity designed to add value and improve an organisation’s operations

Question 2

Internal auditors perform many different types of assignment. Common
examples include:

Answer 2

 Value for money assignments
 Operational audits
 The audit of IT systems
 Financial audit

Question 3

Value for money (VFM) is concerned with

Answer 3

obtaining the best possible
combination of services for the least resources. It is often referred to as a
review of the three Es

Question 4

The three E’s

Answer 4

 Economy – obtaining the best quality of resources for the minimum cost.
 Efficiency – obtaining the maximum departmental/organisational outputs
with the minimum use of resources.
 Effectiveness – achievement of goals and targets
(departmental/organisational etc.)

Question 5

An operational audit is a

Answer 5

systematic review of the efficiency and effectiveness of
operations within the organisation. The focus of the audit is on the processes
which take place within the organisation to identify if they can be streamlined
and performed more efficiently. The more efficient a process is, the more
profitable the organisation should be

Question 6

Financial audit

Answer 6

The main aim of a financial reporting system is to create accurate, complete
and timely information which can be used for decision making and business
planning. This information is also needed to satisfy the requirements of actual
and potential investors and trading partners