The Institute of Internal Auditors (IIA) defines Internal Auditing as:
“An independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. The internal audit activity 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.”
Consistent with its mission, the Internal Audit Department provides management with information, appraisals, recommendations, and counsel regarding the activities examined and other significant issues.
The department executes an approved audit plan and will perform the following tasks in accordance with its overall strategy:
Independence is essential to the effectiveness of the internal audit function. In carrying out the duties and responsibilities, the Director of Internal Audit will issue reports to the Vice President and General Counsel in charge of the internal audit function, Senior Vice President, and the Vice President concerned. The Director of Internal Audit will meet with the Finance and Audit Committee of the Board of Trustees periodically to report the plans for audit activity, the results of audit activity, and to provide any other information required. The Director of Internal Audit has direct access to the President and the Board should matters of immediate significance arise which demand such attention.
Certified Internal Auditor
Are you curious about becoming a Certified Internal Auditor (CIA)? This article will explain the roles and responsibilities of this position, detail how you can earn your certification, and how you can use this designation in your career.
As a CIA, your role is to independently and objectively evaluate the operations within an organization. The role can vary depending on the industry or company needs, but in general, the auditor is tasked with maintaining relevant information flow between the company’s board of directors and/or senior management and making sure that operations and business processes are in compliance with company policy and legal regulations.
The biggest difference between an internal and external auditor is the type of information you are managing. As an internal auditor, you’re tasked with the holistic management of information, which is primarily non-financial information. As a hired external auditor, your job is to examine the financial condition or business dealings, as well as compliance with different laws within the industry. As an internal auditor, understanding the functionality of each kind of external auditor helps one better prepare for the documentation and requirements when an audit is required.
Who is an ideal candidate for the CIA?
Anyone who envisions a career in internal auditing is the perfect candidate for the CIA Certification. Being a CIA will offer auditors more opportunities for advancement as well as a higher salary. Students are excellent candidates for the CIA Exams:
What is an Internal Audit?
An internal audit is a managerial tool that serves to improve processes and internal controls within a company. It consists of a department within a company that is mandated to provide an assessment of the organization’s risks, control environment, and operational effectiveness. The department reports to the board and senior management, which are within the organization’s governance structure.
What do Internal Auditors Do?
As an internal auditor, your role includes providing an in-depth dive into the company’s business dealings and processes and then analyzes and converts the information into meaningful and insightful data to improve operations. To do this, the auditor uses techniques such as:
Responsibilities of Internal Auditors
Ensuring the success of an organization and bridging the gap between the board of directors and the corporate management team is a key performance indicator. Below are some of their specific responsibilities and duties:
Qualities of a professional Internal Auditor
You must be objective, independent, and impartial when carrying out internal audits. Below are some of the qualities a professional internal auditor should possess.
Becoming a Certified Internal Auditor (CIA)
The Institute of Internal Auditors (IIA) awards the CIA certification. Becoming a CIA requires a University degree, two years of work experience, and passing a three-part exam. (There are some exceptions to education and work experience requirements.)
A CIA enjoys the following benefits and opportunities:
Internal audits play a significant role in the company’s growth by ensuring that the company is moving in the right direction. As an aspiring CIA, you must possess qualities such as integrity, assertiveness, excellent communication, teamwork, and independence.
Do you think the role of Internal Auditor could be right for you? Learn more about how HOCK international can help you advance your career and succeed in achieving this prestigious credential.
This information sheet (INFO 221) provides guidance to assist organisations that are considering whether to have an internal audit function, and to ensure the quality of this function. It may be relevant to directors and audit committees of entities subject to the ASX principles.
This information sheet explains:
What is internal audit?
An internal audit function can contribute to corporate governance by providing an organisation's directors and audit committee with independent reviews of, and suggestions for, improving the design and operation of the organisation’s:
Internal audit can be an important element in the control environment of organisations and can contribute to more effective risk management.
What do the ASX Corporate Governance Principles say about having an internal audit function?
The ASX Corporate Governance Principles and Recommendations (PDF 2.2MB) state that if a listed entity does not have an internal audit function, they need to explain the reason for this. Additionally, they should explain how risk management and internal control processes are managed, evaluated and continually improved in the absence of an internal audit function.
How can internal audit be independent?
In order to ensure the independence of the internal audit function from management:
Internal audit services may be provided by employees, external service providers or a combination of the two. However, the external auditor should generally not also provide internal audit services to the same organisation.
How is the quality of internal audit work assured?
Internal audit should maintain a quality assurance and improvement program, including workpaper reviews and performance evaluations. Periodic external reviews of internal audit may also be appropriate.
Where can I get more information?
Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.
This is Information Sheet 221 (INFO 221), issued on 20 June 2017. Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.