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NATURE OF INTERNAL AUDIT WORK (Governance-Risk-Control professional…

- - - - Significant risks are identified and assessed
      - Appropriate risk response are selected that align risk with the organisation's risk appetite
      - Organisational objectives support and align with the organisation's mission
  - - - Overseeing risk management and control
      - Promoting appropriate ethics and values within the organisation
      - Making strategic and operational decisions
  - - - Assets are safeguarded
      - action and decision of the organisation are in compliance with laws, regulations and contracts
      - Financial and operational information is reliable and possesses integrity
- - - - Reliability, timeliness, transparency
      - Internal and external reporting
    - - Compliance with laws, regulations and contracts
    - - Reliability and integrity of financial and operational information
      - Effectiveness and efficiency of operations
  - - - Control is either a process or an action taken
      - Management is responsible for implementing internal control, but other parties may also be involved
      - Controls are implemented to minimise risk, thus ensuring that an organisation's objectives are met.
- - - - Preventive controls: Are more cost-effective than the other controls
      - Detective controls :More expensive than preventive controls, but they too essential
      - Corrective control: Take over when improper outcomes occur and are detected.
    - - Proper authorisation of transactions and activities: Initiating a transaction is the first step in information processing, transaction be authorised by the appropriate level of personnel.
        
        Staff or lower-level management : Instructed how and when to implement these general authorisations by approving all transactions within the limits set by the policies
        
        Specific authorisation : Has to do with individual transactions, significant transaction and require authorisation from higher level of management
        
        General authorised :Management establishes policies for the organisation to follow.
      - Adequate documents and record : Perform the function of transmitting information throughout the organisation and between different organisations
        
        Source documents
        
        Designed to obtain sufficient details, in a certain order, to fulfil business and accounting needs
        
        Sufficiently simple to complete to ensure that they are understood and accurately completed
        
        Prepared at the time the transaction takes place to increase the likelihood of accurate recording details of the transaction
        
        Have space for signature to identify responsibility for the preparation and authorisation of the document
      - Segregation of duties: Is to reduce the opportunities for an individual to make and then conceal errors or irregularities while performing a task
        
        Authorising the transations
        
        Recording the transaction
        
        Executive the transaction or having custody of assets
      - Safeguarding of assets and information : The use of physical precautions, such as keeping inventory behind locked doors, limiting access to the warehouse and hiring guards, has proved to be effective safeguards for safe
      - Independent checks : Is the careful and continuous review of the above four control activities by independent senior manager and internal auditors
  - - - Organising :Implies the Co-ordination of people and plans in order to execute the planning
      - Directing: Is the pro of allocating resources to ensure objectives are met, and includes elements of leadership, motivation and communication
      - Planning: All the activities of the organisation must be properly planned to ensure that every individual understand his or her specific role in achieving the objectives of the organisation
      - Controlling: The process of ensuring that the directed actions have been executed as planned to ensure that objectives are achieved
      - Factors influencing the risk with reference to the philosophy and operating style management
        
        Aggressive management in an environment of poor internal control activities
        
        A high turnover of management, especially the accounting personnel
        
        A single person dominating the operating and financial decision-making pocess
        
        An unduly aggressive approach of management to financial reporting
      - Methods used to communicate tasks and responsibilities to personnel
        
        Job descriptions delineating specific duties, reporting relationships, and constraints
        
        An organisation of code of conduct
        
        Assignment of responsibility and delegation of authority to deal with such matters as organisational goals and objectives, operating functions and regulatory requirements
        
        A manual on accounting policies and procedures
        
        Organisational policy regarding such matters as acceptable business practices, conflict of interest, and other codes of conduct
        
        Clear boundaries of authority
      - The organisational structure : Provides the overall framework for planning, organising, directing and controlling operations
        
        Grouping activities
        
        The organisational structure should be suitable for the type of organisation