{"id":156,"date":"2020-03-21T04:40:12","date_gmt":"2020-03-21T04:40:12","guid":{"rendered":"https:\/\/www.cac.net.in\/blog\/?p=156"},"modified":"2024-10-11T17:35:00","modified_gmt":"2024-10-11T12:05:00","slug":"internal-audit-and-corporate-governance","status":"publish","type":"post","link":"https:\/\/www.cac.net.in\/blog\/internal-audit-and-corporate-governance\/","title":{"rendered":"Internal Audit And Corporate Governance"},"content":{"rendered":"\n

According to that document, the internal\nauditors must provide the Board with a mechanism to systematically review and\nevaluate the adequacy and effectiveness of the entity’s processes, systems and\noperations. <\/p>\n\n\n\n

The audit area must be in tune with the\nobjectives of its organizations and understand their expectations, which can\nvary drastically from one organization to another.<\/p>\n\n\n\n

Remember that normally the activities of an\ninternal audit function are carried out in four steps: planning, executing,\ninforming and monitoring.<\/p>\n\n\n\n

To\nplan:<\/strong><\/p>\n\n\n\n

The internal audit works with the Board and\nmanagement to identify the areas of greatest exposure, and those in which\ngreatest security is that of a structured process; the Internal Audit must submit\nrecommendations on the review areas during a given period in the form of an\naudit plan, which is typically established with a 12-month horizon, even if it\nis reviewed and updated periodically<\/p>\n\n\n\n

\"internal<\/figure>\n\n\n\n

Run:                            <\/strong><\/p>\n\n\n\n

The audit plan contains a number of areas,\nwhich are usually addressed as individual audit projects. In the execution of\nan audit project, the internal audit team evaluates the adequacy and\neffectiveness of internal processes and controls. It also performs detailed\nwork in key areas as planned, to identify deficiencies.<\/p>\n\n\n\n

Report:<\/strong><\/p>\n\n\n\n

The internal audit reports the findings and\nobservations, as well as the conclusions, as appropriate. The conclusions and\nmanagement response plans are agreed upon and communicated through the Board of\nDirectors or the relevant Board committee. In addition to reporting the results\nof individual audits, the Internal Audit normally provides summary reports to\nallow a broader picture of the entity’s controls and risk exposures to be\ndeveloped.<\/p>\n\n\n\n

Tracing:<\/strong><\/p>\n\n\n\n

According to internal audit companies in India<\/a><\/strong>, the internal audit will work with the management to track the progress made, to address the deficiencies identified in the previous audits and ensure that these are resolved in a timely manner and in their entirety.<\/p>\n\n\n\n

Another issue considered in the document of\nthe Institute of Internal Auditors of Australia, has to do with the key\nattributes of an internal audit function, which are established in\ninternational standards for professional practice.<\/p>\n\n\n\n

An\neffective internal audit function should:<\/strong><\/p>\n\n\n\n