The Objectives Of Internal Auditing

Assessor should follow procedures and policies at all times and ensure they are up to date with regulations and legislation, ensure equality and diversity and monitor own work.

The effective use of IA departments causes less dependency and or reliance on external auditing. Ineffective use of this department can create reliability of the external audit firm, high costs for use of their services. Ideally, effective auditing should be done twice a year, consist of a short period of attendance; whereas, if it is possible for charities to have an internal auditing department, auditing will be carried out as often as every three months and the likelihood of any mismanagement of funds will be greatly reduced and this lead to gradual abolition. For effective IFC practices, various functions should be implemented to address each area so that effective operations are in place and at the same time reduce

It is common industry knowledge that an audit plan provides the specific guidelines auditors must follow when conducting an external audit. External public accounting firms conduct external audits to ensure outside stakeholders that the company’s financial statements are prepared in accordance with generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS) standards.

Internal audit- In-house assessment to ensure that all policies and external standards are followed, implemented, and operating effectively.

Auditors have the responsibilities as well as management to report internal controls. The auditors must examine closely management’s claim of effectiveness and also physically test the controls. After the examination, the auditors should express their opinion and any recommendations to fix any internal control weaknesses.

Company’s new CAE can explain to the non-audit employees that IAD’s objective is to add values and help improve the business processes as well as company performance, which will affect each employee significantly. It is important to let all employees understand that the answers or thoughts they provide to the internal auditors will not be used against them. Moreover, establishing good relationship and providing ongoing communication with the non-audit employees can make them feel more comfortable to share their feedback and thoughts, and can reduce the “us vs. them” relationship between company’s non-audit employees and the staff of internal auditors.

When auditing a public company, the auditor must form an opinion on the effectiveness of internal control

The objective is to ensure that auditors obtain sufficient knowledge of the business of the entity to enable them to identify and understand the events, transactions or practice that may have a significant effect on the financial statements or the audit. This knowledge of the business helps to assess the levels of control and inherent risk and to determine audit procedures.

The auditor’s responsibility is to express an opinion on the fairness of the presentation of the financials, and an opinion on the effectiveness of internal control of financial reporting, including an opinion on whether management’s assessment of internal control is fairly stated.

The purpose of an audit is to enhance of confidence in the financial statements. An auditors opinion validates this purpose.

An auditor is requested to convey an opinion on whether the financial statements are fairly stated, be it through a voluntary audit or a statutory audit. Before embarking on an audit of the financial statements the auditor is obligated to follow certain steps; this is called the Audit Process. The Audit Process allows the auditor to perform a high level service to the client, ensure that the auditor complies with the auditing standards and limits the auditor’s risk of legal liability or reputational damage. The audit process is subdivided into four phases which is:

Internal auditing is an independent objective assurance and consulting acitivity designed to add value and improve an organizations operations.

Internal auditors cannot effectively provide an analysis on the company’s internal dealings as they are part of the company. External auditors, however, can observe these processes from the outside and then determine where the funds of the company and whether the dealings adhere to the regulations. Using external auditors in a company prevents conflict of interest from happening. Conflict of interest is a situation where an individual or organization has multiple interests and of those multiple interests, one could possible corrupt the motivation for an act on the other when the auditor has any kind of beneficial interest in their client’s performance. In other circumstances, there is also the threat of familiarity where auditors become

According to the Institute of Internal Auditors (IIA), (2011), the internal auditing is a team of consultants, a department and a division or other practitioner which independent, have objective assurance and conduct a consulting activity which is designed to add value and improve the organization operations. The internal auditor can help an organization in achieving its objectives by bringing a discipline and systematic approach in order to improve and evaluate the effectiveness of risk management, control and governance process.

The role of internal audit is to provide independent declaration that an organization’s threatadministration, governance and internal control processes are functioning effectively. Internal auditors deal with concerns that are essentially important to the existence and success of any organization. Unlike external auditors, they aspect beyond financial possibilities and statements to reflect wider problems such as the organization’s reputation, development, its power on the location and the approach it treats its organizations.In summary, internal accountantssupport organizations to thrive.