Internal auditing
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The document discusses internal auditing. It defines internal auditing as an independent, objective assurance function that aims to add value and improve an organization's operations by evaluating risk management and governance processes. It outlines the roles of internal auditing such as being objective in assessing controls and independent in reviewing operations. The history shows how the role has evolved from checking accounts to facilitating risk management. Internal auditing can assist external auditors in audit planning and has taken on more complex roles in recent years to address corporate uncertainty.
Internal auditing
- 1. INTERNAL AUDITING ACC 4031 ACC4031 Sherliza 1
- 2. The Definition of Internal Auditing states the fundamental purpose, nature, and scope of internal auditing. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Definition of Internal Auditing ACC4031 Sherliza 2
- 3. With the existence of an internal audit function, the management of an organisation may delegate to it some of it supervisory roles IA function constituted a separate component of internal control Brief history of Internal auditing ACC4031 Sherliza 3
- 4. Brief history of Internal auditing 1950 • Check account records 1960 • Assess compliance 1970 • Examine procedure 1980 • Evaluate controls 1990 • Report to system of internal control 2000 • Assess risk management 2001 • Facilitate risk management 2002 • Assure risk/control 2010 • ?? ACC4031 Sherliza 4
- 5. Being objective in determining whether internal controls were well planned and were operating as planned Independent reviews to ensure that operations were efficient and effective Assisting management in timely identification of business risks and help to act upon them Monitoring internal control are appropriately aligned with a diverse and increasingly complex field of corporate uncertainty. Roles ACC4031 Sherliza 5
- 6. The executives - appoint managers and staff to undertake the work carried out by the organisation Separation of ownership from management means some form of accountability must be established to ensure that the executives and staff discharge their responsibilities to owners and stakeholders Separation of ownership ACC4031 Sherliza 6
- 7. How does internal auditing assists external auditors in their audit planning? What can you say about the internal audit’s evolving role in recent years. Discuss and submit a group written exercise by next class. ASSIGNMENT ACC4031 Sherliza 7
- 8. Internal audit practices in Malaysia, Pearson-Prentice Hall The Internal Auditor at Work, IIAM References ACC4031 Sherliza 8