Kế toán, kiểm toán - Chapter 15: Internal auditing

CHAPTER 15INTERNAL AUDITING1Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettTRADITIONAL VIEW OF INTERNAL AUDITING (IA)Internal auditing is an independent appraisalfunction established within an entity as a service tothe organisation. (Ref. AUS 104)It involves examination and evaluation of:Internal control and information systemsFinancial and operating informationEconomy, efficiency and effectiveness of operationsWhether or not the entity has complied with relevant legislation2Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettNEW DEFINITION OF IAInternal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes — Institute of Internal Auditors (Gay et al., p. 669).3Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettINSTITUTE OF INTERNALAUDITORS (IIA)Professional organisation, represented in > 100 countriesAim is to represent, promote and develop professional practise of internal auditingFirst developed in Australia in 19524Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettCURRENT STANDARDS FOR INTERNAL AUDITOR (ISSUED BY IIA) Standards for the Professional Practice ofInternal Auditing (SPPIA) issued by IIA. Purposes:Outline basic principlesProvide a framework for performing and promoting IA activitiesEstablish the basis for the measurement of IA performanceFoster improved organisational processes and operations5Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettATTRIBUTE AND PERFORMANCE STANDARDSAttribute Standards:Address characteristics of organisations and individuals performing IA activitiesPerformance Standards:Describe the nature of IA activities and provide criteria against which performance of these services can be measured6Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettCURRENT ATTRIBUTE AND PERFORMANCE STANDARDS OF THE IIA7Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettINDEPENDENCE OF INTERNALAUDIT (IIA STANDARD 1100)Essential that IA is, and is seen to be,independent of area being audited.IA department should report to board of directors or audit committeeHead of IA should have direct access to board of directorsBoard should approve appointment or removal of head of IAManagement and Board should be aware of work schedules, staff requirements and budgets of IA department8Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettSCOPE OF IA WORK IN AUSTRALIA (1998 SURVEY)Most important areas:Computer and financial auditInternal control reviewsFraud detectionOperational audit9Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettMAJOR ISSUES CONFRONTING IAOutsourcing of IA, especially to Big FourDifficulty in changing profile of IIA and having members seen to be more value adding than checkingExpectations gap between chief executive officers and internal audit managersDevelopment of specialised IA groups, e.g. quality, environment auditors10Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettFACTORS DRIVING CHANGEAbility of IA to show that it adds valueBenchmarking of IA departments as a means of assessing qualityGreater emphasis on corporate governance in current environment11Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettRISK-RELATED TASKS OF IMPORTANCE TO INTERNAL AUDITORS• Providing expert advice about risk exposures and their management• Raising awareness about risk exposures• Contributing to the improvement of risk management systems• Providing ongoing assurance about the efficiency and effectiveness of risk management systems• Focus on the risk exposures associated with the achievement of an organisation’s objectives• The services provided by IA will be distinctly related to the management of risk exposures . . . Ref.: Exhibit 15.2 (p. 677)12Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettCONTROL-RELATED TASKS OF IMPORTANCE TO INTERNAL AUDITORS• Provide expert advice about control strategies, structures and systems• Raise awareness about risk exposures and related controls• Contribute to the improvement of control systems• Provide ongoing assurance about the efficiency and effectiveness of control strategies, structures and systems• Contribute enhanced understandings of the different types of control that can be used in organisations• Focus on control as a facet of risk management• The services provided by IA will be distinctly related to the management of risk exposures . . . Ref.: Exhibit 15.3 (p. 677)13Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettEXPECTED FUTURE RELATIONSHIP WITH EXTERNAL AUDITOR As both groups of auditors move to strategic risk analysis approach, greater co-ordination between IA and EA can be expectedCo-ordination aided by recent developments in corporate governance, with audit committee playing key co-ordination role14Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAPPROACHES TO ASSESSING RISK MANAGEMENT, CONTROL AND GOVERNANCE PROCESSESRef.: Figure 15.1, p. 679)15Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger Simnett