Basics of Internal Audit

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Basics of Internal Audit
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What is an Internal Audit?

• As defined by the Institute of Internal Auditors
  (IIA), internal audit is an independent,
  objective assurance and consulting activity
  designed to add value and improve an
  organization's operations. It helps an
  organization accomplish its objectives by
  bringing a systematic, disciplined approach to
  evaluate and improve the effectiveness of risk
  management, control, and governance processes.

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Internal Auditor Characteristics

• Skills being sought in Internal Auditors
• Communication skills
• Technical skills and expertise
• Integrity and character
• Intelligence
• Business acumen
• Professional skepticism
• Inquisitive
• Self-starter
• IT Knowledge
• Personality

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Internal Audit Structure

• Functional reporting includes approving the
  internal audit charter approving the risk based
  internal audit plan approving the internal audit
  budget and resource plan hiring and firing of
  chief audit executive etc.
• Administrative reporting comprises day-to-day
  activities of the internal audit function
  including budgeting and management accounting.

Management
Board and Audit Committee
Functional Reporting
Administrative Reporting
Internal Audit Executive
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Internal Auditor Charter Elements

• The internal audit charter is a formal document
  that defines the internal audit activity's
  purpose, authority and responsibility. The
  properly structured internal audit charter should
  include
• Mission and scope of the internal auditing
  department
• Accountability of the Chief Audit Executive (CAE)
  to management and an audit committee
• Independence of the internal auditing function
• Responsibilities of the CAE and internal auditing
  staff
• Range of authority of the CAE and internal
  auditing staff
• Applicable standards of audit practice

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Internal Audit Process

• Schedule and plan the audit
• Coordinate the Audit Plan with others
• Select the audit team
• Review previous audit reports
• Opening meeting
• Conduct audit
• Closing meeting

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• Want to learn more about audit, and best
  practices for auditing? ComplianceOnline webinars
  and seminars are a great training resource. Check
  out the following links
• Risk Based Internal Auditing (RBIA)
• Internal Auditing Essentials for Medical Device
  Manufacturers
• How to Audit GRC Programs?
• Role of the Audit Committee in Corporate
  Governance
• Internal Audit's Role in Enterprise Risk
  Management
• OCEG Approved GRC (Governance, Risk and
  Compliance) Professional Seminar
• Auditing Technology and IT Investment Management