Please enable JavaScript.
Coggle requires JavaScript to display documents.
Nature of Internal Audit Work (Advantages and disadvantages of internal…
Nature of Internal Audit Work
standards of Governance Risk Control
2100 Nature work
IIA must
Provide reasonable assurance that : process are functioning as intended
Provide recommendations : for improving the organisation is operated
Evaluate and improve G+RM+ C process
2110 Governannce
Promoting ethics and values
Ensuring effective orgarnisation perfomance
Effective communication of risk and control
Effective coordinates between stakeholders
the AAI must and make approachable recommendations for improving the governance process to accomplish the following objectives
2110 Governance A1
AAI must
Evaluate the design
Implementation
Effectiveness of the organisations ethics
Programmes and activities
2120 Risk Management
IAA must
refer to intrepretation
RM= management and Board's responsibility
Evaluate the effectiveness and contribute to the improvement of RM
2130 - Control
Chief Audit Executive must
Control process should ensure achievement of control objectives
form an opinions o the adequacy and effectiveness of the control
what is internal control
action taken by management
enhance the likelihood that established adjectives will be achived
SAICA
acceptance by management
help in achievement of management's goals
Methods and procedures
business property conducted in orderly and effective member
COSO( committee sponsoring orgarnisation
provide reasonable assurance
or objectives to be achieved
process designed
Objectives of internal control to ensure :
Reliability and intergrity of financial and operational information
effectiveness and effeciency of operations
achievement of organisation strategic objectives
compliance with the policies,procedures,laws,rules and regulations
safeguarding assets
Reporting objectives
internal and external auditors
financial and non financial reporting
reliability,timeless,trasparency of;
Complience objectives
complience with the law, regulations and contracts
Internal control
consist of five elements
control activities
risk assessment
information and communication
control environment
monitoring
Control environment:
philosophy and style of senior management
management style
intergrity and ethical values
four management principles :planning,organisation,directing and controling
Organisational structure
should be sustainable for the type of organisation
grouping of activities
consider form and nature of organisation
the internal auditor can consider factors which might influence the risk with reference to the philosophy and operations
Methods for communication task and responsibilities to personel
formal organisation and operational plan
organisational code of conduct
an organisational chart and job description
clear boundries of authority
Human resource management
regular rotation of duties within the limits
career path possibilities
personel schedule
the formalisation of personel practice
the appointment and evaluation of personel
strive to maintain a high morale against personel
Risk assessment
Control activities
classification of internal control activities
preventative
prevent an undesirable events they happen
password authorisation
detective
bank reconciliatin and balance
identify undesirable events wen they happen
corrective
reverse undesirable events
insurance on assets
Types of internal control activities
proper documents and records
safeguarding of assets
authorisation of transaction and activities
independent checks
segregation duties
Responsibilities for internal control
management
and is accountable
implement control to achieve
design and implement control activities
Organisational objectives
risk threatning acheivement of objectives
management implementation of controls to mitigate risk
The function of the external auditor
focus evaluation of finance control
accounting system and related internal control
express on opinion on the reasonableness of financial statements
financial accounting system
Functions of internal auditor
by promoting continuous improvement
comprehensive
evaluating effectiveness and efficiancy
assurance and recommendation
Advantages and disadvantages of internal control
prevention of resources
promotion of reliable financial reporting
achieve goals
complience with levelsregulation
Advantages:
builds reputation
Disadvantages:
success of organisation
reliability of financial information and complience laws and regulations
reasonable assurance
internal controls cannot ensure: inherit limitation of internal control,
Control of environment
internal control objectives do not change in computerised environment
pervasive effect
weak controls
IT environment as a whole
specific softwareprogrammes
IT controls divided into : general control,