Chapte的r_07Internal control and control risk.pptVIP

Tests of Operating Effectiveness of Control Type inquiring of personnel, observing personnel, inspecting documents and reports, reperforming the control Timing evidence required as to effectiveness over entire year additional tests may be necessary between date of interim and year end Extent determined by the planned assessed level of control risk Documentation described in audit programme cross referenced to working papers detailing performance and results Tests in Comp Info System Test data Integrated test facility Parallel simulation Coordination with Internal Audit Effectiveness of internal audit Organisational status Scope of work Technical competence Professionalism Internal Audit Internal audit is an independent, objective assurance and consultancy 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. Internal Audit Similarities to external audit: Need to establish reliability and accuracy of records, Establish compliance with legislation and regulation, Ensure management’s policies are applied, Safeguard assets. Internal Audit In addition to the roles similar to external audit must: Ensure efficiency and effectiveness of operations, and Ensure that systems are improved and implemented as necessary. Internal Audit- Independence Free from influence by management or others. High status/Qualified Reports to a high level of management. No other duties. Adequate resources and ethical. IA relationship with external auditor Remember different aims and objectives. Similarities in work and approach. Preferably avoidance of duplication of work. External may rely on internal’s work in some areas (e.g. systems documentation and detailed testing). Rarely, internal may rely on work of external, e.g. branches. IA- Specialism and Tasks May be broad focus (whol