Learning Objectives LO1 Explain the importance of auditing. LO2 Distinguish auditing from accounting. LO3 Explain the role of auditing in information risk reduction. LO4 Describe the other major types of audits and auditors. LO5 Provide an overview of international auditing and its impact on Canadian audit standards. 1
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Learning Objectives LO1 Explain the importance of auditing. LO2 Distinguish auditing from accounting. LO3 Explain the role of auditing in information risk.
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Learning ObjectivesLO1 Explain the importance of auditing.
LO2 Distinguish auditing from accounting.
LO3 Explain the role of auditing in information risk reduction.
LO4 Describe the other major types of audits and auditors.
LO5 Provide an overview of international auditing and its impact on Canadian audit standards.
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Internal AuditingInternal 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.
www.theiia.org
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LO4
Internal AuditingInternal auditors need to be independent of line managers in an organization.
Independence helps internal auditors be objective.
Independence is achieved by having the internal auditor report directly to a very high level in the organization, such as the audit committee of the board of directors or the Chief Financial Officer.
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LO4
Internal AuditingInternal auditors have a larger scope of activities than the external auditor.
Internal auditors perform audits of financial reports for internal use similar to the function of the external auditor.
In addition, the expanded-scope activities of internal auditors include practices known as operational auditing.
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LO4
Operational AuditingOperational auditing refers to the study of business operations for the purpose of making recommendations about:
the economic and efficient use of resources, the effective achievement of business objectives,
and compliance with company policies.
The goal is to help managers meet their responsibilities and improve profitability.
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LO4
Public Sector(Governmental) AuditingGovernments at all levels make use of public sector
auditors.– Auditor General of Canada (OAG).– Provincial auditor generals.– Municipal internal auditors.– Federal ministries and provincial agencies.
Public sector audits – Include financial audits, compliance audits, and