Internal Audit assignment
Consequently, the work of internal auditors differs from the work of external auditors in term of strategic planning, materiality and procedures used to obtain the required level of evidence. For instance, in order to obtain assurance over a company’s revenue, external auditors are likely to test efficiency of key controls and request several counter parties (based on the materiality level) to confirm annual turnovers with the company. In contrast to that, internal auditors may not set any materiality level, but they are likely to test all relevant controls implemented and review a rather large sample of internal invoices. As the latter may be too time consuming, it may be decided to follow a schedule for internal audit reviews by locations.
Internal audit assignments will vary from business to business as these assignments will be determined by management of each company depending on its needs. Namely, a financial audit is conducted to identify errors and detect fraud in both financial and managerial reporting.IT related assignments are carried to ensure that IT systems produce reliable information for report preparation. Value for money audits(often referred to 3Es or Economy, Efficiency and Effectiveness) help to find out the best combination of services for the least amount of resources.
Operational audits provide assurance that polices are appropriate and are adhered to.
For example, if a company is exposed to interest rates risk, the internal auditors should ensure that the risk is managed in accordance with the set procedures, such as involvement of borrowed funds with both fixed and floating interest rates, etc.
Internal auditors may also perform special investigations if fraud is suspended, as well as assist external auditors in obtaining requested information during an audit engagement.
Internal audit increases the quality of information provided to the management. However, care should be taken to ensure that reports of the internal audit department are objective and independent, as internal auditors, on one hand, are employed by management and, on the other hand, they should review management’s work. Consequently, internal auditors may suffer pressure to oversee certain inefficiencies or fraud.
Internal Audit assignment
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