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Nature of Internal Audit work (Committee of Sponsoring Organisation …
Nature of Internal Audit work
Strategic Plan and Operational Activities
Understanding the organisation (Siyafunda Limimited)
Mission
To provide fast-food to statisfy consumer needs
Strategic Objectives
To support our outlets in proving in a timely manner
Vision
To be leading fast-food chain in Southren Africa
Objectives of Internal control
reliability and integrity of
financial operational information
effectiveness and efficiency of operation
safeguarding of assets
Importance of Internal Audit
What is Internal Audit?
South African Institutes of Chartered Accountants definition:
methods and procedures
accepted by management
help in achievement of managements goal
business properly conducted in orderly and efficient manner
Committee of Sponsoring Organisation
Provide reasonable assurance
Iron objectives to be achieved
Process designed
Institutes of Internal Audit definition:
take action taken by management
enhance the likelihood that establish objectives
Governance-Risk-Control
Nature of work
2110 Governance
A1 The Internal Audits Activity must: evaluate design, implementation and effectiveness of the organisational, ethics related objectives, programmes and activities
A2 The Internal Audit Activity must : assess whether the IT governance of the organisation sustains and support the organisation strategies and objectives
2120 Risk- Management
Internal Audit must :evaluate the improvement of risk management
2100 Institutes of Internal Audi
Evaluate and improve government processes + risk management processes + processes providing reasonable assurance + processes are functioning as intended
Recommendations
For improving the organisational operation
2130 Control
Internal Audit Activity must : assist the organisational in maintaining effective controls by evaluating their effectiveness and efficiency and promoting continuous improvement
2100 Nature of Internal Audits work
to audit /asses /evaluate
the governance processes
risk management processes to control processes of the organisation
Committee of Sponsoring Organisation framework and internal control process
risk management
control activities
Control Environment
Informal and communication
monitoring
philosophy and style of senior management
4 management principles
directing
controlling
organisationg
planning
Methods used for communication
consideration
organisational code of conduct
formal memos
manual memos
internal memos
organisational chart and job descriptions
Human Resources Management
appoint and evaluation of staff
personal scheduling
rotation of duties within limits
Management style
integrity and ethical value
organisational structure
sustainable for type of organisation
grouping of activities
consider form and nature of organisation
classification of control
preventative
detective
corrective
Types of Internal control
proper documents and records
safeguarding of assets
authorisation of transactions and duties
independent of assets
segregation of duties
advantages and disadvantages and limitations of internal control
disadvantages
internal control cannot ensure
reasonable assurance
success of organization
limitations
ensure an organisations success
ensure the reliability of financial reporting and compliance with legislation and regulations
advantages
achievement of goals
prevention of resource losses
controls in IT environment
internal control objectives do not change in computerised
weak controls can influence application controls negatively
Responsibility of internal control
external auditors
financial accounting system
internal auditors
assurance and recommendation
management
implements internal control