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Audit Personnel, Internal Auditing, Outsourcing, Business Risk,…
Audit Personnel
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Outsourcing
The use of external suppliers as a source of finished products, components or services.
Reasons:
- Costly to maintain existing function consisting of entity's employees
- Some directors feel the need for the function for short-term only
- Some internal auditors are not qualified to carry out their duties.
Business Risk
Resulted from significant conditions, evets, circumstances, actions or inactions that could adversely affect an entity's ability to achieve its objectives and execute its strategies, or from the setting of inappropriate objectives and strategies.
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Internal Auditing
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Functions:
- Audits board reports that are not audited but external auditors
- Assists the entity in implementing the new standards
- Liaises with external auditors regarding the audit of financial report
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Outsourcing
Disadvantages
- Costly in the long-term
- Can cause self-review threat if the same firm provides both internal and external audit services
- Private and confidential information can be easily leaked
- Company will lose in-house skills
Advantages
- Costs such as training costs are eliminated
- Appropriate for short-term basis
- Can provide immediate internal audit department
- Service provider has different specialist skills and can assess what is required
Definition:
Outsourcing is the use of external suppliers as a source of finished products, components or services.
Reasons for Outsourcing
- Costly to maintain existing function consisting of entity's employees
- Some directors feel the need for the function for short-term only
- Some internal auditors are not qualified to carry out their duties.
Business Risk
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Risk resulting from significant conditions, events, circumstances, actions or inactions that could adversely affect an entity’s ability to achieve its objectives and execute its strategies, or from the setting of inappropriate objectives and strategies.
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