Question

Internal auditors are an important part of the internal control structures of all types of organizations.

a) Describe the objectives of an internal audit function.
b). Explain two ways in which internal auditors can maintain independence with respect to the activities they audit.

Answer 1

a) Internal audit function :

It is an indepent assuarance of an organisations overall internal management . An internal audit checks wether an organisation's risk management, governance and internal control processes are efficient and compliant towards the organisations policies procedures and plans . Internal audit also checks on the reliabilty of the organisation's financial accounting and reporting.

Objectives of internal audit function:

1. To assist the organisation in its working towards its goal by providing efficient administration of its operations and adhere to the organisations policies and procedures.

2. To monitor the effectiveness of the internal control system of the organisation and also give the guidelines to improve the same.

3. To check the accuracy and correctness of the financial accounting records and reports of the organisation.

4. To ensure that the accounting policies and procedures followed by the organisation is as per the relevent accounting standards and practices

5. To prevent and detect fraud in the organisation

b) Two ways in which auditors maintain independence with respect to activities they audit

1. First and formost is the attitude of the auditors . They should be capable of making unbiased decisions in respect of the operations of the organisation and the activities of the management.

2. Auditor should maintain professional sckeptiscism i.e they should have a questionable mind and should be alert to the indicators of mistatement or fraud. they should also maintain a proper charter of the activities to be undertaken in the internal audit.