Internal Audit Charter Assignment

Topics: Auditing, Audit, Internal control Pages: 3 (537 words) Published: February 27, 2013

Internal Auditing & Risk Management
Assignment C2
Internal Audit Charter

Jennifer Micheli
3759644
June 5, 2012

The first error/weakness:
Identification:
The purpose of internal audit at ACTION NOW corporations should not be to assist the employees in discharging their fiduciary responsibilities. Explanation:
Refer to attribute standard 1000 – Purpose, authority, and responsibility. The internal audit charter establishes the internal audit activity’s position within the organization including the nature of the CAEs reporting relationship with the board. Correction:

The purpose of the internal audit at ACTION NOW corporation is to assist the board of directors in discharging their fiduciary responsibilities. The second error/weakness:
Identification:
The CAE should not be reporting to the Supervisor of Accounting. Explanation:
Refer to attribute standard 1111 – Direct interaction with the board The CAE must communicate and interact directly with the board. Correction:
The CAE must report and communicates directly with the board. The third error/weakness:
Identification:
If fraud is found during an audit, the auditor should not be authorized to terminate the employment of the individual involved. Explanation:
Refer to attribute standard 1322 – When non-conformance impacts the overall scope or operation of internal audit activity, the CAE must disclose the non-conformance and the impact to senior management. If fraud is occurring it should be reported immediately to senior management and the board of directors so that it can be dealt with appropriately. Correction:

If fraud is found during an audit, the auditor must report it to the CAE who will immediately report it to senior management and the board. Fourth error/weakness:
Identification:
The Chief Audit Executive is authorized to have unrestricted access to all company records, systems, property, and personnel, and should not be denied access to journal vouchers that are...
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