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AUDIT AND INTERNAL CONTROL - Coggle Diagram
AUDIT AND INTERNAL CONTROL
ROLE OF AUDITORS
DEFINITION
An independent, objective assurance & consulting activity designed to add value and improve an organisation's operation
ROLE INTERNAL AUDITOR
Assessment of how information on fraud and irregularities is reported
reviews of the compliance framework and specific compliance issues
Review and objective evaluation of the governance, risk and control environment of the company and entities across the group
Follow-up visits to determine the status of mgt plan
ROLE & SCOPE OF EXTERNAL AUDIT
Identification or anticipation of significant changes for financial report
Coordination with internal audit to avoid duplication
Liaison with subsidiaries' auditors on consolidation of accounts
Nature and extent of audit procedures to be performed
INTERNAL CONTROL
LIMITATION
A good internal control system cannot turn poor manager into a good one
Controls are only designed to cope with routine transactions and events
Internal control system can be by-passed by collusion and management override
BENEFIT
Reliability of financial reporting
Compliance with applicable laws and regulation
Effectiveness and efficiency of operation
OBJECTIVES
Prevention and detection of fraud and error
Accuracy and completeness of the accounting records
Safeguard of assets of the business
Time preparation of financial information
DEFINITION
Comprises the whole network of systems established in an organization to provide reasonable assurance that organizational objectives will be achieved