Internal Auditing and Accountability

Accounting and Auditing

Course Overview

 

The management of an organisation seeks to achieve certain aims and objectives. To succeed in this, they implement measures such as internal control, one of the most important ways of ensuring the success of the total effort by management. The internal auditor assists management to help achieve the aims and objectives of the organisation, especially regarding risk management, internal control and corporate governance. In order to equip the internal auditor with the necessary skills, emphasis is placed on the development of:

  • An internal auditing philosophy
  • Auditing techniques and computer auditing skills
  • Communication skills
  • Insight into management skills
  • The student's personality to meet the requirements set by the Code of Ethics of the Institute of Internal Auditors
  • Identifying and evaluating controls in the computers information system environment.
  • Introducing concepts of economic crimes, irregularities and forensic auditors with particular emphasis on fraud.
  • Managing an internal audit department.
  • Interaction with the Board of Directors and audit committee.

Course Objectives

  • Define internal audit, its scope and function within the company
  • List the internal audit standards constituting the framework of the internal audit activity
  • Distinguish the types of internal audit assignments related to operational, compliance or financial internal audit
  • Describe the internal audit fieldwork guidelines and apply techniques for risk identification, controls identification and controls testing
  • Select the appropriate internal audit test tools and list the advantages and disadvantages of each
  • Identify best sampling techniques in an internal audit assignment in terms of sample size or sample selection
  • Recognize fraud and express internal auditor’s responsibility upon fraud detection

Course Outline

  • Risk and internal audit overview

    • Definition of risk
    • Types of risk in an organization
    • Functions of management: planning, organizing, implementing and controlling
    • Defining internal audit
    • Internal audit as a function of corporate governance
    • Scope and building blocks of corporate governance
    • Reasons to have an internal audit function
    • Distinguishing internal from external auditing
    • Scope of internal auditing: the internal audit charter
    • Staffing the internal audit function
    • Role of audit committee 
  • Internal audit standards
    • Attribute standards
    • Performance standards
  • Types of internal auditing
    • Performance auditing
    • Operational auditing
    • Financial auditing: accounting cycles audited by the internal audit function
    • Compliance auditing
    • 20 questions directors should ask about the internal audit function
  • Internal audit implementation: fieldwork guidelines
    • Information gathered by internal auditors
      • 4 qualities of information
      • Sources and nature of information
      • Assessing the degree of persuasiveness
    • Types of engagement procedures
      • 15 internal audit test tools
      • Observing, interviewing and examining records
    • Internal audit working papers
      • Best practices for managing working papers
      • Retention policies
    • Communicating fieldwork results and recommendations
      • Legal considerations for communicating results
      • 4 attributes of an observation or recommendation
      • Disseminating results and exit meetings
  • The fieldwork: risk-based auditing
    • Defining management assertions
    • Risk assessment process
      • Reason for risk based audit planning
      • Evaluating risks
      • Techniques to identify the auditable units
        • Criteria for selecting auditable units
        • Scoring and weighing risks
      • Prioritizing risk and developing  audit plan
      • Methods to generate list of risks
    • Identifying entity level controls to mitigate risks
      • Broad definition for types of controls
      • Essential components of effective internal control system: 'COSO' model
      • Criteria for unsatisfactory rating for control components
      • Methods to generate list of controls
        • Insights on flowcharting for understanding cycles and controls
    • Testing of internal controls
      • Design and implementation of an internal control
      • Operating effectiveness of an internal control
    • Tips and tools for audit sampling
  • Fraud
    • Definition and characteristics of fraud
    • Internal auditor’s role in a fraud case
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