Chapter Seventeen: Internal and Value-Added Auditing

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Chapter 17
Internal and Value-Added Auditing
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Internal Auditing
DEFINED Internal auditing is an independent and
objective assurance and consulting activity that
is designed to add value to improve an
organizations operations. It helps an
organization to 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 Auditing

• Assurance and Consulting Activity
• Assurance services
• Consulting Services
• Control Self-Assessment
• A Systematic and Disciplined Approach
• Evaluate and improve the effectiveness of risk
  management, control, and governance processes

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Internal Auditing
The Institute of Internal Auditors Code of Ethics
Reporting Company Fraud
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Scope of Value-Added Internal Auditing

• Operational Auditing
• The need for operational auditing
• Comparison of operational and financial
  auditing
• Characteristics of operational auditing
• Scope and objectives
• Reporting operational audit results

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Scope of Value-Added Internal Auditing

• Developing and Maintaining Relationships with
  Auditees
• Obtain auditee feedback.
• Seek the auditees input and keep them
  informed.
• Do not be a nitpicker.
• Report the good with the bad, and recognize
  auditee contributions.

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Scope of Value-Added Internal Auditing

• Information Systems Audits
• Compliance Audits
• Financial Reporting and Control Audits
• Program and Performance Audits

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Trends in Value-Added and Internal Auditing

• Global internal auditing
• Outsourcing internal auditing
• Internal auditing by any other name