Module 6 - Internal Audit Flashcards
Internal auditing is…
What is it designed to do?
An independent, objective assurance and consulting activity
Designed to add value and improve and organisations operations
How does internal audit help an organisation accomplish its objectives?
By bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes
What is the mnemonic for the key elements of internal audit function?
I’M WISE
What does I’M WISE stand for?
Independent (of day-to-day operations)
objectively Measures and evaluates
Within the organisation
Integral part of the framework of business controls
Service to all levels of the organisation
Effectiveness as well as efficiency of operations
What is IAF?
Internal Audit Function
The main objectives of an internal audit function (‘IAF’):
Provide reasonable assurance over the adequacy and effectiveness of risk management and control systems within a company and assist all staff to effectively discharge their responsibilities
Are all companies required to carry out internal audit?
No
There are exceptions like government bodies
The IAF should report to and be overseen by what?
The audit committee
The IAF has responsibilities to who?
Directors and management
The existence of an effective IAF should provide shareholders with…
A degree of assurance regarding the effective operation and control of the company
IAF can include different types of audit:
Financial audit Systems audit Management audit Value for money audit Contract audit Operational audit Post-implementation review Investigations Inspection and Quality Control Compliance audit Follow-up Audit Culture Audit
What is the mnemonic considered for effective internal audit function?
PARISS
What does PARISS stand for?
internal audit Process
role of the Audit committee
Resource and competence
Independence
position and Status of internal audit
internal auditing Standards
How can an organisation help to ensure the independence of internal audit function?
Reporting directly to audit committee
Plan approved by the audit committee
Audit committee appoints the internal audit manager
Remunerating internal audit staff to support independence
Not being involved in operational areas
Why have an IAF?
Helps gain assurance that management and control of the organisation is robust
