AUI 2601 TOPICS
1.The definition of internal auditing
Definition, IA objective, IA Focus areas, Development , Standards, IPPF
2.The functional role of internal auditing
4 Roles of management, IA assist management, IA role as advisor, IA activity as functions
3.Professional matter pertaining to internal auditing
IIA Code of ethics, Characteristics of profession, IPPF
4.The Qualifications and characteristics of an internal auditor
Qualifications and characteristics of IA
5.The purpose, authority and responsibility of an internal auditor
Authority of IA, Roles of IA, Fraud
6.Concepts relating to internal audit
Risks, Types of control
7.The internal audit process
Evidence, Phases of audit
8.Internal audit engagement procedures and tools
Working papers, Tools
9.The relationship between internal auditing and related function.
Relationships between IA and EA, audit committee, general/financial management
1
,• CONTROLLING BODY and the EXECUTIVE MANAGEMENT are responsible for establishing the organisation and
then ensuring that it operates successfully.
• BOARD OF DIRECTORS is responsible mainly for the governance process. • Cannot perform and monitor
• EXECUTIVE MANAGEMENT is responsible for conducting the risk management and control processes. all respects within an
• AUDIT COMMITTEE is a subcommittee of the board overseeing the internal audit activity and external organisation
auditors.
• MANAGEMENT: • Delegates duties and
• Set goals. responsibilities
• Plan what has to be done and what means are to be used.
• Organise to have the necessary means/ people available at the right time.
• Give guidance and exercise control to ensure that objectives are met. • Is not involved in the day-to-
• Keep records of all activities so that they are able to give account of their curatorship over the day activities
interests of the stakeholders.
Main: is determined by the needs of the board and In fulfilling this challenging role, internal auditors have to provide
executive management, and internal auditor must ensure
that these needs are satisfied by the internal audit report,
information to management about whether:
which he or she submits to the board and the audit • Only the plans approved by management have been executed or are being executed
committee • The anticipated results are being achieved
• The results can be improved
• Management’s plans proved to be effective
• Is an independent, objective assurance and • Where and how management can improve on their plans
consulting activity
• designed to add value and improve an
organisations operations
• It helps an organisation accomplish its objectives
by bringing a systematic, disciplined approach to
• Evaluate and improve the effectiveness of risk
management, control and governance processes.
2
,• Is an independent, objective assurance and
consulting activity
Independent
• designed to add value and improve an
organisations operations Governance
Objective
processes
• It helps an organisation accomplish its objectives
by bringing a systematic, disciplined approach to
• Evaluate and improve the effectiveness of risk
management, control and governance processes. Control Assurance
Processes service
• Independent – free from control or influence of others
• Objective – aim of purpose; when used as an adjective; not Def
biased
Risk M of IA Consulting
• Assurance – promise or guarantee processes service
• Assure – convince; make certain
• Consulting – specialist who gives professional advice
• Operation – method or procedure of working
• Systematic – Methodical; according to a plan
• Disciplined – able to behave and work in a controlled way Effectiveness Add value
• Approach – begin to deal with; make a proposal or
suggestion to
Evaluate
• Evaluate – find or judge the value of &
Accomplish
objectives
• Improve – make or become better Improve
• Effectiveness – producing the desired result
• Risk – hazard, for example, loss or damage
• Control – power to direct something; regulate
• Governance – government, control or authority; the action,
manner or system of governing.
3
, • An interpretation of factual circumstances and events in the organisation that have
Main: is determined by the needs of the board of directors been exposed by the internal auditor’s examination
and management of an organisation so as to assist them
• Constructive and cost-effective suggestions to identify risks and to eliminate
in improving the governance, risk management and
problems/ and or to improve the efficiency and effectiveness of the organisation’s
control processes.
governance, risk management and control processes
The two main focus areas of an internal audit:
Consulting services – advisory in nature and often are
conducted at the request of management. Tailored to 1. Independence from the normal policy-making function by only identifying
resolve specific issues that management has identified. and recommending areas of improvement or change
Assurance services - examination and appraisal of the 2. Examining and evaluating the goals, policy, decisions, standards, procedures
record-keeping and control systems relating to the and controls of management
administrative and financial aspects of an undertaking 3. Conducting special assignments requested by management where internal
audit can add value through their knowledge and skills, yet remain
independent and act in an advisory capacity on results of such assignments.
1. Reinforcements of all systems and controls by evaluating their
adequacy and application 4. Communicating in an authorative manner with management by means of
reporting to improve and add value.
2. Reviewing the reliability of records
3. Assisting directly with the discovery of fraud and error. Misconception of internal auditing:
4. Assisting indirectly with the prevention of fraud and error by
recommending and ensuring proper functions and controls. MAIN MISCONCEPTION:
• Internal auditing is the same as external auditing
5. Determining whether management policies are being complied
with in all respects OBJECTIVES
6. Determining whether all applicable statutory requirements are External Auditor:
being complied with test the underlying transactions that from the basis of
financial statements.
Internal Auditor:
seeks to advice management on whether its major
operations have sound systems of risk management an
internal controls
4
1.The definition of internal auditing
Definition, IA objective, IA Focus areas, Development , Standards, IPPF
2.The functional role of internal auditing
4 Roles of management, IA assist management, IA role as advisor, IA activity as functions
3.Professional matter pertaining to internal auditing
IIA Code of ethics, Characteristics of profession, IPPF
4.The Qualifications and characteristics of an internal auditor
Qualifications and characteristics of IA
5.The purpose, authority and responsibility of an internal auditor
Authority of IA, Roles of IA, Fraud
6.Concepts relating to internal audit
Risks, Types of control
7.The internal audit process
Evidence, Phases of audit
8.Internal audit engagement procedures and tools
Working papers, Tools
9.The relationship between internal auditing and related function.
Relationships between IA and EA, audit committee, general/financial management
1
,• CONTROLLING BODY and the EXECUTIVE MANAGEMENT are responsible for establishing the organisation and
then ensuring that it operates successfully.
• BOARD OF DIRECTORS is responsible mainly for the governance process. • Cannot perform and monitor
• EXECUTIVE MANAGEMENT is responsible for conducting the risk management and control processes. all respects within an
• AUDIT COMMITTEE is a subcommittee of the board overseeing the internal audit activity and external organisation
auditors.
• MANAGEMENT: • Delegates duties and
• Set goals. responsibilities
• Plan what has to be done and what means are to be used.
• Organise to have the necessary means/ people available at the right time.
• Give guidance and exercise control to ensure that objectives are met. • Is not involved in the day-to-
• Keep records of all activities so that they are able to give account of their curatorship over the day activities
interests of the stakeholders.
Main: is determined by the needs of the board and In fulfilling this challenging role, internal auditors have to provide
executive management, and internal auditor must ensure
that these needs are satisfied by the internal audit report,
information to management about whether:
which he or she submits to the board and the audit • Only the plans approved by management have been executed or are being executed
committee • The anticipated results are being achieved
• The results can be improved
• Management’s plans proved to be effective
• Is an independent, objective assurance and • Where and how management can improve on their plans
consulting activity
• designed to add value and improve an
organisations operations
• It helps an organisation accomplish its objectives
by bringing a systematic, disciplined approach to
• Evaluate and improve the effectiveness of risk
management, control and governance processes.
2
,• Is an independent, objective assurance and
consulting activity
Independent
• designed to add value and improve an
organisations operations Governance
Objective
processes
• It helps an organisation accomplish its objectives
by bringing a systematic, disciplined approach to
• Evaluate and improve the effectiveness of risk
management, control and governance processes. Control Assurance
Processes service
• Independent – free from control or influence of others
• Objective – aim of purpose; when used as an adjective; not Def
biased
Risk M of IA Consulting
• Assurance – promise or guarantee processes service
• Assure – convince; make certain
• Consulting – specialist who gives professional advice
• Operation – method or procedure of working
• Systematic – Methodical; according to a plan
• Disciplined – able to behave and work in a controlled way Effectiveness Add value
• Approach – begin to deal with; make a proposal or
suggestion to
Evaluate
• Evaluate – find or judge the value of &
Accomplish
objectives
• Improve – make or become better Improve
• Effectiveness – producing the desired result
• Risk – hazard, for example, loss or damage
• Control – power to direct something; regulate
• Governance – government, control or authority; the action,
manner or system of governing.
3
, • An interpretation of factual circumstances and events in the organisation that have
Main: is determined by the needs of the board of directors been exposed by the internal auditor’s examination
and management of an organisation so as to assist them
• Constructive and cost-effective suggestions to identify risks and to eliminate
in improving the governance, risk management and
problems/ and or to improve the efficiency and effectiveness of the organisation’s
control processes.
governance, risk management and control processes
The two main focus areas of an internal audit:
Consulting services – advisory in nature and often are
conducted at the request of management. Tailored to 1. Independence from the normal policy-making function by only identifying
resolve specific issues that management has identified. and recommending areas of improvement or change
Assurance services - examination and appraisal of the 2. Examining and evaluating the goals, policy, decisions, standards, procedures
record-keeping and control systems relating to the and controls of management
administrative and financial aspects of an undertaking 3. Conducting special assignments requested by management where internal
audit can add value through their knowledge and skills, yet remain
independent and act in an advisory capacity on results of such assignments.
1. Reinforcements of all systems and controls by evaluating their
adequacy and application 4. Communicating in an authorative manner with management by means of
reporting to improve and add value.
2. Reviewing the reliability of records
3. Assisting directly with the discovery of fraud and error. Misconception of internal auditing:
4. Assisting indirectly with the prevention of fraud and error by
recommending and ensuring proper functions and controls. MAIN MISCONCEPTION:
• Internal auditing is the same as external auditing
5. Determining whether management policies are being complied
with in all respects OBJECTIVES
6. Determining whether all applicable statutory requirements are External Auditor:
being complied with test the underlying transactions that from the basis of
financial statements.
Internal Auditor:
seeks to advice management on whether its major
operations have sound systems of risk management an
internal controls
4
