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What is Internal Audit University of Date

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What is Internal Audit University of Date * What is an internal control? What/Who is Internal Audit? A University department that reports directly to the Board of ... – PowerPoint PPT presentation

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Title: What is Internal Audit University of Date


1
What is Internal AuditUniversity of Date
2
What/Who is Internal Audit?
  • A University department that reports directly
    to the Board of Regents (BOR) through the
    Secretary of the BOR and the Chair of the Regents
    Audit and Financial Advisory Committee (RAFAC)

3
University of Internal Audit Organizational
Chart
Board of Regents
Chair-Regent Audit and Financial
Advisory Committee
Secretary of the BOR
President
Internal Audit Director
4
What is Internal Audits purpose?
  • To assist the Board of Regents in carrying out
    their fiduciary responsibility of the governance
    of the university.
  • To assist the University community in recognizing
    and managing risks to the university.

5
What kind of work does Internal Audit do?
  • Audits
  • Consultations
  • Investigations
  • Education

6
Audits
  • Evaluations of various processes, functions,
    departments, and activities (NOT people) to
  • Identify risks
  • Determine whether those risks are adequately
    mitigated

7
Consultations
  • Provide advice and information to University
    departments on internal controls, risk
    management, and sound business practices in such
    areas as policy development, system or process
    development, specific issue resolution, etc.

8
Investigations
  • Conduct internal investigations regarding
    allegations of fiscal misconduct and fraudulent
    actions that adversely impact the University.
  • This work looks at the actions of individuals and
    their intent.

9
Education
  • Conduct workshops or any other information
    presentation to the University community on
    internal controls, risk management, fraud
    prevention, and sound business practices.

10
How Does IA Figure Out What Audits to Conduct?
11
Our Scope-Start with Risk Assessment
  • Identify key risks of the organization
  • Look at all areas of exposure, not just
    financial
  • Focus on the issues that matter most
  • Develop audit plan to examine higher risk areas

12
Risk Assessment
  • Factors that affect risk
  • External influences (laws, regulations)
  • Internal influences (policies, culture)
  • Opportunity for misappropriation
  • Degree of automation vs. manual processes
  • Volume and size of activity
  • Decentralization of processes

13
Thinking About Risk
  • Administrators have an important role
  • Responsible for fiscal affairs of the unit
  • Lots of expectations from lots of constituents
  • Funding sources attach strings
  • Public scrutiny
  • Too much to do, too little time, too few
    resources means you have to evaluate risk and
    balance conflicting demands
  • Whistleblowers monitor actions

14
Audit Universe
  • Core Processes
  • Key Functions/Activities
  • Common Functions/Activities
  • Organizational Units

15
The Audit Universe
  • Core Processes
  • HR/Payroll
  • Procurement
  • Sponsored Programs/Research
  • Student-Related Services
  • Academic

16
The Audit Universe
  • Key Functions/Activities (university-wide or
    campus based) examples
  • Risk Management
  • Facilities Management
  • Information Technology Services
  • Contracts and Grants
  • Media Relations

17
The Audit Universe
  • Common Functions/Activities (department-based)
    examples
  • Youth Programs
  • Conferences/seminars
  • Study Abroad
  • Organizational units (2,500 of these across the
    University, within 500 higher level orgs)

18
Why IA May Come Knocking on Your Door
  • As part of a core process evaluation audit, a key
    function/activity audit, a common
    function/activity audit
  • As part of a continuous audit (looking at
    specific transactions for compliance)
  • As a department (organization unit) audit
  • As part of an investigation
  • In response to a request (consultation)

19
What is an Internal Control?
  • An internal control is a process within an
    organization designed to provide reasonable
    assurance that certain things happen the way we
    want them to
  • Reliability and integrity of information
  • Compliance with policies, plans, procedures,
    laws, regulations, and contracts
  • Safeguarding of assets
  • Economical and effective use of resources
  • Accomplishment of established objectives
  • and goals
  • The cost of a control should not exceed its
    benefit!

20
Examples of Internal Controls
  • Directive Controls
  • Designed to establish desired outcomes.
  • Examples include
  • Laws
  • Policies
  • Procedures
  • Meetings

21
Examples of Internal Control
  • Preventative Controls
  • Designed to prevent errors from occurring
  • Examples
  • Segregation of duties
  • Pre-authorizations
  • Adequate documentation
  • Physical control over assets
  • Computerized techniques, such as passwords and
    transaction limits.

22
Examples of Internal Controls
  • Detective Controls
  • Designed to detect errors
  • Examples include
  • Reviews and comparisons
  • Account reconciliations
  • Physical counts of inventories

23
Audits What does IA look for?
  • In general, Internal Audit looks at what is
    happening and compares it to what should be
    happening, as defined by
  • Laws, rules, regulations, policies
  • Sound business practices

24
Audits What does IA look for?
  • Strategic Planning - clarity of objectives/goals
    risk assessment
  • Culture, Management Style, Synergism
  • Knowledge of authority
  • Clarity of responsibilities
  • Communication

25
Audits What does IA look for?
  • Awareness of applicable laws, rules, regs,
    policies
  • Presence of controls to ensure objectives are
    achieved
  • Segregation of responsibilities
  • Monitoring
  • Evaluation and continuous improvement

26
A Word About Documentation
  • What is documentation?
  • In writing
  • Forms of external documentation
  • correspondence from outside the institution
  • invoices, contracts, memorandums of understanding
  • Forms of internal documentation
  • forms, internal correspondence, schedules

27
A Word About Documentation
  • What does it do?
  • Provides evidence of business activities
  • Provides evidence of authorizations
  • Why do we need it?
  • Audit trail the series of documentation that
    provides evidence of the events that transpired
    to effect a business transaction. It helps to
    determine the process occurred as intended to
    ensure compliance and propriety.

28
Fraud/Fiscal Misconduct
29
Elements of Fraud/Fiscal Misconduct
  • Act or failure to act
  • Intent to deceive
  • Relied upon by others
  • Loss occurs

30
Attributes Commonly Present in Fraud/Fiscal
Misconduct
  • Need financial, ego
  • Opportunity
  • Rationalization

31
Indicators of Fraud
  • Doesnt take vacations
  • Change in life style

32
Resources
  • Enter resources related to your campus

33
How to Reach Internal Audit
  • Website (internalaudit.yourschool.edu)
  • Phone xxx-xxx-xxxx
  • Fax xxx-xxx-xxxx
  • Email IA_at_yourschool.edu
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