Describe opportunities for the internal audit function to provide insight on effective internal control?

Expert Solution

Internal Audit Function – “An appraisal activity established or provided as a service to the entity. Its function includes, amongst other things, examining, evaluating and monitoring the adequacy and effectiveness of internal control”

· Evaluation of internal control. The internal audit function may be assigned specific responsibility for reviewing controls, evaluating their operation and recommending improvements thereto. The internal audit function provides assurance on the control to management and those charged with governance regarding the design, implementation and operating effectiveness of internal control, including those controls that are relevant to the audit.

· Examination of financial and operating information. The internal audit function may be assigned to review the means used to identify, recognize, measure, classify and report financial and operating information, and to make specific inquiry into individual items, including detailed testing of transactions, balances and procedures.

· Review of operating activities. The internal audit function may be assigned to review the economy, efficiency and effectiveness of operating activities, including nonfinancial activities of an entity

· Review of compliance with laws and regulations. The internal audit function may be assigned to review compliance with laws, regulations and other external requirements, and with management policies and directives and other internal requirements

If an entity has an internal audit function and its relevance to the external auditor’s work, then the external auditor should determine:

A. If the specific work of the internal auditor can be used and if so, to what extent.

B. Such work is adequate for the audit purpose.

ekkarill92 answered 1 year ago

Identify an internal control structure and describe an effective internal control structure, relating to accounting and...

Identify an internal control structure and describe an effective internal control structure, relating to accounting and preparing accurate financial statements.

An organization’s internal audit department is usually considered an effective control mechanism

An organization’s internal audit department is usually considered an effective control mechanism for evaluating the organization’s internal control structure. The Birch Company’s internal auditing function reports directly to the controller. Comment on the effectiveness of this organizational structure.

Discuss the importance of understanding internal control in developing an effective audit program. In that context,...

Discuss the importance of understanding internal control in developing an effective audit program. In that context, include in your discussion a general overall position and specifically the internal control questionnaires for either the Revenue and collection Cycle or Production (Inventory) Cycle, which also includes internal control over Inventory Transaction Processing. Matters such as seperation of duties should be part of your response. Include in your answer several (3 would be enough) important considerations to satisfy sound internal control for each...

1.Why is an internal audit function well qualified to add value by providing insight through its...

1.Why is an internal audit function well qualified to add value by providing insight through its consulting activities? 2.What are the differences between an assurance engagement and a consulting engagement? 3. What are three types of consulting engagements the internal audit function can perform? Give an example of each. 4.What specific skills are required of an internal auditor performing consulting engagements? 5.What steps are involved in: a. Planning an advisory consulting engagement? b. Performing an advisory consulting engagement? d. Communicating...

What is the relationship between internal control,internal audit , audit committee and corporate governance ?

write an audit program for internal control of cash

Describe each of the five characteristics of effective control and provide an example for each.

Several firms have internal audit function to govern their business operations. The head of internal audit...

Several firms have internal audit function to govern their business operations. The head of internal audit department of one of your clients has invited you to give a talk to the members of his department during their annual training week. He would like your views on the different roles of external and internal auditors, the type of work that each carry out and their reporting responsibilities. Required: Draft notes that you will use when giving your talk, paying particular attention...

Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements,"...

Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements," provides a guide for auditors when performing integrated audits. by visiting PCAOB website How should the auditor determine which controls to test? How might the auditor use evidence obtained in the audit of the financial statements when concluding on the effectiveness of internal control over financial reporting?

What is the objective of an internal audit vs. external audit What is the function of...

What is the objective of an internal audit vs. external audit What is the function of the internal and external auditor Are there organization(s) providing oversight of internal and external auditors For organizations having both internal and external audits, what is the relationship (if any) between the two group of auditors - internal auditors & external auditors What is the relationship (if any) between the internal auditor (and the external auditor) and management Who does the auditors (internal auditor &...

Question