INTERNAL AUDIT

BY CLEYON KURIAN
ROLL NO :14
INTERNAL AUDIT

An independent, objective

assurance and consulting activity
designed to add value and improve
an organisation's operations.
- Institute of Internal Auditors (IIA)
Why Internal Audit is Important ?
 in some situations it is required by statute (SOX)
 in some situations it is required by codes of good
practice (codes of corporate governance)
 it provides an independence check on the control
systems in a company
 it is a management control.
 reassures investors and regulators
 helps ensure the effectiveness and efficiency of
operations
 underpins investor confidence.
TYPES

 financial audit
 operational audit
 project audit
 value for money audit
 social and environmental audit
 management audit.
 financial audit

 theconventional tasks of examining records

and evidence to support financial and
management reporting in order to detect
errors and prevent fraud.
operational audit

 examination and review of a business

operation
 identification
of areas for improvement in
efficiency and performance including
improving operational economy, efficiency
and effectiveness
Project auditing

 Project auditing is about looking at a specific project:

 commissioning a new factory
 implementing new IT systems
 and asking whether these were done well. So the
focus is different and has more to do with:
 were the objectives achieved?
 was the project implemented efficiently.
 what lessons can be learned from any mistakes made?
value for money audit

 In a value for money audit the auditor assesses

three main areas.
 Economy
 Efficiency
 Effectiveness
Social and environment audit

 The social audit would look at the company's contribution

to society and the community. The contributions made
could be through:
• Donations.
• Sponsorship.
• Employment practices.
• Education.
• Health and safety.
• Ethical investments
Management audit

 A management audit is defined as 'an objective

and independent appraisal of the effectiveness of
managers and the corporate structure in the
achievement of the entities' objectives and
policies.
 Its aim is to identify existing and potential
management weaknesses and recommend ways to
rectify them.
THANK YOU