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Introduction to Business Environment (SIYAFUNDA LIMITED (Establishing…
Introduction to Business Environment
STRUCTURE OF A TYPICAL ORGANISATION
Board of Directors
Audit Committee
Share of Owners
External Auditors
Chief of Directors
Financial Director
HR Director
Internal Auditing
Marketing Director
Operations Director
SIYAFUNDA LIMITED
PRINCIPLES AND PRACTICES
GOVERNANCE FRAMEWORK
Boards of committees
Regular meetings with staff
Building an ethical organisational culture
Regular board meetings
Risk management
Establishing various policies and procedures
Accounting and finance related activities
HR related activities
Information technology governance
Stakeholder relationships
NATURE OF INTERNAL AUDIT WORK
ADVANTAGES OF INTERNAL CONTROL
Ensure compliance with legislation and regulations
Prevent the reoutation of the organisation from becoming tarnished
It helps to promote reliable financial reporting
GENERAL CONTROL TO THE IT ENVIRONMENT
Hardware and software controls
System documentation controls
Security controls related to IT
LIMITATION OF INTERNAL CONTROL
Ensuring the reliability of financial reporting and compliance with legislations and regulations
Ensure the organisation success
ELEMENTS
CONTROL ACTIVITIES
CLASSIFICATION OF INTERNAL CONTROL
Detective controls
Corrective controls
Preventive controls
TYPES OF INTERNAL CONTROL ACTIVITIES
Segregation of duties
Proper authorisation of transactions
Safeguarding of assets and information
Independent checks
MONITORING
Information and technology
CONTROL ENVIRONMENT
CHARACTERISTICS OF CONTROL ENVIRONMENT
THE ORGANISATIONAL STRUCTURE
The suitable organisational structure
FACTORS CONSIDERED
Grouping Activity
METHODS USED TO COMMUNICATE
FACTORS TO BE CONSIDERED
Assignment responsibility
Job description
Organisational policy
RESPONSIBILITIES
Organisational charts
Boundaries of Authorities
Code of conduct of business
Formal organisational and operational plan
THE PHILOSOPHY AND STYLE OF SENIOR MANAGEMENT
ELEMENTS
Planning
Directing
Organising
Controlling
HUMAN RESOURCE MANAGEMENT
CATEGORIES
Personnel scheduling
Career path possibilities
Regular rotation duties
IMPORTANCE OF INTERNAL CONTROL
DEFINITION OF INTERNAL CONTROL
In accordance to Institute of Internal Audit(IIA) and IPPF
In accordance to South African Institute of Charted Accontance(SAICA)
In accordance to Commette of Sponsoring Organisation(COSO)
PRIMARY OBJECTIVES OF INTERNAL CONTROL
Compliance objectives
Reporting objective
Operational objective
RESPONSIBILITIES FOR INTERNAL CONTROL
FUNCTIONS OF EXTERNAL AND INTERNAL AUDITOR
EXTERNAL AUDITOR
Accounting System and analysis
Evaluation of related internal controls
Financial control and opinions of Financial Statements
INTERNAL AUDITOR
Assistance in maintaining effective controls
Evaluations of controls based on risk assessmant
FUNCTIONS AND RESPONSIBILITIES FOR MANAGEMENT
Risks threatening archievements of objectives
Implementations of controls to prevent risks from occuring
Organisational Objective
INTRODUCTION TO INTERNAL AUDITING
ROLE OF INTERNAL AUDITING IN BUSINESS ENVIRONMENT
Functions of the internal activity
Activities
Assisting in developing and drafting policies
Providing advice to management on controls
Conducting staff training
ASSURANCE SERVICE
INDEPENDENT AND OBJECTIVE OPINION PROVIDED ON THE FOLLOWING ACTIVITIES
Whether managements policies and procedures are adhered to:
Whether processes are mitigating the risk threatening achievement of organisational objectives
Whether the organisational is adhering with relevant laws and regulations
INTERNATIONAL PROFESSIONAL PRACTICE FRAMEWORK
TYPES OF GUIDANCE
RECOMMENDED GUIDANCE
SUPPLEMENTAL GUIDANCE
ASSISTANCE PROVIDED TO INTERNAL AUDITOR
Risk Management
Governance
ELEMENTS
Educational products
Research Studies
IMPLEMENTATION GUIDANCE
ASSISTANCE PROVIDED TO INTERNAL AUDITORS
MANDATORY GUIDANCE
ELEMENTS
Definition of Internal Auditing
In accordance to International Profesionals Practice Framework
Code of Ethics
Principles and Rules of Conduct
Intergrits
Objectivity
Confidentiality
Competency
CORE PRINCIPLES
PRINCIPLES
Demonstrates Completeness
Promotes Organisational Improvement
Provide risk-based assurance
Communicate Effectively
Demonstrates Intergrity
Standards
CHARACTERISTICS
Purpose and responsibilities
ATTRIBUTE STANDARD(1000)
Independent and objectives
Quality assurance and Improvent program
HISTORY OF INTERNAL AUDITING
FACTORS CONTRIBUTING TOWARDS DEVELOPMENT OF INTERNAL AUDITING
Management faced an expanded span of control
Potential subjective reporting from line managers
The complexity of transactions
The need for management to have eyes and ears in the field
The effect of increasing number of transactions