Wednesday, October 14, 2009

Three Key Elements of Internal Audit

Internal Audit has three key pillars in order to successfully carry out their roles and responsibility to the organisation, i.e. approach, resources and infrastructure.

1. Approach
a. Planning where to identify what areas are the top priority that needs to be audited (via Risk Management) and communication with the control owner (the Management) to establish responsibility and commitment.

b. Engagement related to the appraisal activities to test whether the controls and the management action plan are adequate and effective.

c. Monitoring involved engaging with the control owner (the Management), to improve their operations and reduce the recurrence of deficiency through reporting and follow up.

2. Resources
a. Responsible, experience and knowlegable Audit Managers

b. Competent and skillfull internal Audit Staff

c. Qualification and computer savvy

3. Infrastructure
a. Management Information System (MIS)

b. Data mining - sampling and red flags

c. System support and full access

All the above elements are equally important but not exhausted of other elements which more or less crucial depends on the individual perceptions. Will elaborate further the sub-element in future posting.

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