Getting to Know Internal Auditing (1)

8/9/2019 Getting to Know Internal Auditing (1)

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GETTING TO KNOW

INTERNAL AUDITING

THE PROFESSION THAT MAKES A DIFFERENCE

Presenter:Organization

Date

Presentation is complements of The IIA Academic Relations


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WHAT’S 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 bybringing a systematic, disciplined approach to

evaluate and improve the eectiveness o ris!

management, control, and governance

processes."


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HIGH LEVEL COMPARISON

Internal Audit

# $road ocus % &ccurate inancials

% iciency(eectiveness

% &ccomplishing objectives

% )ompliance *(la*s, policy

% +aeguarding assets

% &nd more

# Diverse s!ills sets are re-uired

# Integral part o the

organization

FINANCIAL STATEMENT AUDIT

# +peciic ocus % &ccurate inancial statements

% oing concern % /evie*ing historical data

% )ompliance *ith accounting

and other regulations

# Primarily accounting s!ills

# Independent rom the

organization


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INTERNAL AUDITORS ASSESS RISKS…

# 0o help !eep bad things rom happening

# 0o help assure good things can happen

# 0o help management understand % 1here their ris!s are % 1hether the ris!s are under control

% 1hether the ris!s are *orth ta!ing


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FINDING RISKS IS NOT ENOUGH

# Internal auditors evaluate the controls

that help organizations manage ris!s

% &re controls in place2

% Do the controls *or!2

% &re additional controls needed2

% &re there unnecessary controls2 % &re the controls cost3eective2


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FIVE CRITICAL TASKS

# Determine *hether controls are ade-uate

# +uggest improvements to increase eiciency

and eectiveness or to lo*er operating costs

# Determine *hether policies and procedures areollo*ed

# Determine *hether la*s and regulations are

being obeyed# Detect raud or manipulation o records


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EFFECTIVE GOVERNANCE

Board of Directors

Management

E x t

er n al A u

d i t I n

t e r n a l A

u d i t


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MAINTAINING INDEPENDENCE:

DUAL REPORTING RELATIONSHIPS

# &bout 45 percent o )hie &udit

6ecutives 7)&s8 report unctionally to

the &udit )ommittee($oard o Directors % Independent rom audited activities

% 1ide authority

# 9ost common administrative reportingrelationship is to the President()O


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MEETING DIVERSE STAKEHOLDER NEEDS


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INTERNAL AUDITORS

# ind out *hat;s *or!ing and *hat;s not

#


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AUDITORS TELL IT LIKE IT IS

#


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WHAT WOULD YOU SAY…

# I someone as!ed you

*hether or not their

organization neededinternal auditors2


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WHAT WILL AN INTERNAL AUDIT

FUNCTION ACCOMPLISH?

# 1ill it reduce liability or help control ris!s2

# 1ill it ree management to ocus on core

mission2

# 1ill it improve the accuracy o inancial andoperational inormation2

# Do *e need a second opinion2

# )an *e improve service delivery2# 1ill it improve inancial results2


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INTERNATIONAL PROFESSIONAL

PRACTICES FRAMEWORK

# 9andatory uidance

% International +tandards or the Proessional Practice

o Internal &uditing

% Deinition o Internal &uditing % )ode o thics

# +trongly /ecommended

% Position Papers

% Practice &dvisories

% Practice uides

www.theiia.org or https:((global.theiia.org

http://www.theiia.org/https://global.theiia.org/https://global.theiia.org/http://www.theiia.org/


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QUESTIONS?

Getting to Know Internal Auditing (1)

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