Management of the Internal Audit Function

Topics: Auditing, Internal audit, Management Pages: 30 (2411 words) Published: June 30, 2014
MANAGEMENT OF THE INTERNAL
AUDIT FUNCTION
INTERNAL AUDITING
(According to IIA)
-Azleen Ilias-

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IPPF_AI

The learning objectives
 Understanding the importance of proper positioning of the

internal audit function within the organization
 Identify the benefits of various organization structures  Identify the roles of responsibilities of the key positions  Understand the policies and procedures of internal auditing

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IPPF_AI

Relevant standards
 1000 – Purpose, Authority, and Responsibility
 1010 – Recognition of the Definition of Internal Auditing, the 






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Code of Ethics, and the Standards in the Internal Audit Charter 1100 – Independence and Objectivity
1110 – Organizational Independence
1111 – Direct Interaction with the Board
1120 – Individual Objectivity
1130 – Impairment to Independence or Objectivity

IPPF_AI

Relevant standards
 1200 – Proficiency and Due Professional Care
 1210 – Proficiency

 1220 – Due Professional Care
 1230 – Continuing Professional Development
 1300 – Quality Assurance and Improvement Program
 1310 – Requirements of the Quality Assurance and Improvement Program  1311 – Internal Assessments
 1312 - External Assessments
 1320 – Reporting on the Quality Assurance and Improvement Program

 1321 – Use of “Conforms with the International Standards for the Professional

Practice of Internal Auditing”
 1322 – Disclosure of Nonconformance

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IPPF_AI

Relevant standards
 2000 – Managing the Internal Audit Activity
 2010 – Planning

 2020 – Communication and Approval
 2030 – Resource Management
 2040 – Policies and Procedures

 2050 – Coordination
 2060 – Reporting to Senior Management and the Board
 Practice Advisory

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IPPF_AI

The IA function
 2000 – Managing the Internal Audit Activity

 The chief audit executive must effectively manage the

internal audit activity to ensure it adds value to the
organization.

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IPPF_AI

The IA function
 Interpretation:

 The internal audit activity is effectively managed when:

The results of the internal audit activity’s work achieve the purpose and responsibility included in the internal audit charter;

The internal audit activity conforms with the Definition of Internal Auditing and the Standards; and

The individuals who are part of the internal audit activity demonstrate conformance with the Code of Ethics and the Standards.


 The internal audit activity adds value to the organization (and its

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stakeholders) when it provides objective and relevant assurance, and contributes to the effectiveness and efficiency of governance, risk IPPF_AI
management, and control processes.

The IA function
 IA function is effectively managed when:

1. The results of the internal audit function work achieve the purpose and responsibility included in internal audit charter 2. The internal audit function conforms with the Definition of Internal Auditing and the Standards

3. The individuals who are part of the internal audit function demonstrate conformance with the Code of Ethics and the
Standards

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IPPF_AI

The IA function
 1000 – Purpose, Authority, and Responsibility

 The purpose, authority, and responsibility of the internal

audit activity must be formally defined in an internal audit charter, consistent with the Definition of Internal Auditing, the Code of Ethics, and the Standards. The chief audit executive must periodically review the internal audit charter and present it to senior management and the board for approval.

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IPPF_AI

The IA function
 Interpretation:

 The internal audit charter is a formal document that defines the

internal audit activity's purpose, authority, and responsibility. The internal audit charter establishes the internal audit activity's position within the organization, including the nature of the chief audit executive’s functional reporting...

References: Mark., S., & Cris., R. (2009). Internal Auditing: Assurance &
Consulting Services
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