Internal Audit Current Issue

3701 Words15 Pages
8.0 Background
According to Wikipedia, Internal auditing is a profession and activity involved in helping organizations achieve their stated objectives. It does this by using a systematic methodology for analyzing business processes, procedures and activities with the goal of highlighting organizational problems and recommending solutions. Professionals called internal auditors are employed by organizations to perform the internal auditing activity. Internal auditors are employed by companies to do both financial and operational auditing. Their role in auditing has increased dramatically in the past two decades, primarily because of the increased size and complexity of many corporations. Because internal auditors spend all of their time
…show more content…
Relying on the internal audit staff for performance of some of the audit testing may allow the audit to be completed in less time and for a lower fee. When direct assistance is provided, the external auditor should assess the internal auditors’ competence and objectivity. The work of internal auditors should be supervised and evaluated as appropriate under the circumstances.

8.1 Are internal auditors encroaching on the external auditors’ role?
External and internal auditor had different objective this is the external auditor seeks to test the underlying transaction that form the basis of the financial statements whereby the internal auditor seek to advice management on whether its major operations have sound system of risk management and internal controls or in the other words, internal auditor verify corporate operational activity based on documented policies and procedures to determine whether business objective (profitability and regulatory compliance) will achieve and the answer to the entity’s’ governing board or management and external auditors provide reasonable assurance that managements’ assertions over the subject matter (financial statement, compliance) is fairly stated in all material aspects by either error or fraud and they must be independent.
Both internal and external auditor had professions adhere to codes of ethics and professional standard set by professional associations but the major different are
Get Access