Title: The Role of Internal Audit in Enhancing Control and Performance
1The Role of Internal Audit in Enhancing Control
and Performance
2Contents
The Role of IA in enhancing control and
performance Aug 2005
- Managements role in control and performance
- Internal Audits role in enhancing control and
performance - A case study in auditing Governance processes
with the objective of enhancing control and
performance
3The Role of IA in enhancing control and
performance Aug 2005
Managements role
Design and implement processes to achieve
objectives
Objective
Process
4The Role of IA in enhancing control and
performance Aug 2005
Risk not achieving objectives
Risk
Objective
Process
5The Role of IA in enhancing control and
performance Aug 2005
Control to minimize risks
Risk
Objective
Control
Process
6The Role of IA in enhancing control and
performance Aug 2005
Continuous improvement
Risk
Objective
Control
Process
Improvement
7The Role of IA in enhancing control and
performance Aug 2005
Control Environment
Risk
Objective
Control
Process
Improvement
8The Role of IA in enhancing control and
performance Aug 2005
Control Environment
Risk
Objective
Control
Process
Improvement
Compliance Performance
9The Role of IA in enhancing control and
performance Aug 2005
Internal Audit
Independent Objective
Assurance Consulting
Activity Add
Value
Improve Operations
Evaluate and improve the effectiveness of
governance, risk management and control processes.
10Governance process
The Role of IA in enhancing control and
performance Aug 2005
What is governance processes? Why do IA audit
governance processes? When do IA audit
governance processes? How do IA audit governance
processes?
11The Role of IA in enhancing control and
performance Aug 2005
What is governance processes?
Strategic/operational plan
Core responsibilities
Human resources
Financial budget
Performance agreement
Capital budget
Performance measurement
KPIs/ Exception reports
12The Role of IA in enhancing control and
performance Aug 2005
Why do IA audit governance processes?
PFMA and IIA requirements
13The Role of IA in enhancing control and
performance Aug 2005
When do IA audit governance processes?
14The Role of IA in enhancing control and
performance Aug 2005
How do IA audit governance processes?
- Identify the principles of good governance
- Governance IA Report.doc
- Develop an assessment tool kit for each
principle - Compile an assessment report
- Use the assessment report as basis for
improvement
15The Role of IA in enhancing control and
performance Aug 2005
The principles of good governance
- Code of Conduct
- Disciplinary processes
- Functional planning and performance
management - Workload management
- Implementation of audit report
recommendations - Budgeting and financial planning
- Strategic plans risk assessment
- Organogram and structure
- Human resource recruitment
- Human resource training and
development - Roles, responsibilities and job
descriptions - Performance evaluation and skills
development - Risk management structured and
integrated approach - Information management - quality and
flow - Assets - physical safeguard and
control - Information technology risk
assessment
(Example)
16The Role of IA in enhancing control and
performance Aug 2005
Audit report recommendations
Regulatory mandate
17The Role of IA in enhancing control and
performance Aug 2005
Audit report recommendations
- Best Practice Guidelines
- Senior Management needs to agree with the
findings and recommendations for implementation
and improvement - The findings and recommendations need to be
tabled before the audit committee - The recommendations need to be prioritised from
high risk to low risk - Each recommendation needs to be allocated to a
responsible official for implementation -
18The Role of IA in enhancing control and
performance Aug 2005
Audit report recommendations
- Best Practice Guidelines (continue)
- The method of implementation and the scope of the
improvements needs to be defined and
implementation timelines set - A reporting system needs to be established to
report on implementation progress for each
recommendation to both senior management and the
audit committee - The benefits of the implementation of the audit
recommendations must be evaluated and or
quantified so that senior management and the
audit committee can measure the reduction in risk
to the entity -
19The Role of IA in enhancing control and
performance Aug 2005
Assessment toolkit audit report recommendations
20The Role of IA in enhancing control and
performance Aug 2005
Assessment toolkit audit report recommendations
21The Role of IA in enhancing control and
performance Aug 2005
Assessment report
- Rating based on assessment toolkit
- Prioritised areas for managements attention
22The Role of IA in enhancing control and
performance Aug 2005
THANK YOU! Riaan van Niekerk 083 290
4671 rvn_at_eybfn.co.za