Hence, it is worth considering how the effectiveness of the internal audit function could be better protected so as to protect shareholders as well as enable the external auditors to offer a higher quality audit opinion. When internal auditors are efficient in service delivery means that the opinion they will give in the running of the organisation will be the correct position of the company (Get through Guides 2007). The internal auditors will be able to give recommendation to improve the running of the organisation. These recommendations will automatically translate to the company being run in a way that will be beneficial to the shareholders. For the shareholders, this will mean that they will have the true position of the organisation and will be able to make informed decisions on how best to improve the business and they will know if their investment in the company is going to give worthwhile returns. The external auditors on the other hand will meet an organisation that has its affairs in order and the kind of audit opinion they will give will be quality audit opinion. The reason is that the lapses will be recognised and recommendations made to correct them. This will attract investors since they will be confident that their investment will not be mishandled and this will automatically bring more profits to the shareholders. Internal auditors in carrying out their work efficiently can be protected by ensuring their independence is maintained. Despite the fact that the internal auditors are in the company’s payroll, their work has to be free from managerial influence. This is because they need to maintain the highest degree of professionalism when going through the organisation’s books of accounts. If autonomy is maintained, they will be able to offer a true and just view of the books of accounts and give either a qualified audit opinion or unqualified audit opinion (Grey & Manson 2008). The other way to protect them is for the internal auditors to work with the management and not work like they are out to get the mistakes that have been committed. The auditors have to remember that they are not supposed to correct the mistakes done but rather give recommendations on how to rectify or improve. Management cooperation will ensure the records needed for audit will be availed with no problems and thus will ease the work of the auditors. If management cooperation is secured, the other employees will also comply with the set rules they are sure that they will be audited and a true and fair opinion given. The working well with management will also give the internal auditors and the management an avenue to make proper risk management processes that will deter future lapses in the organisation’s books (Get through Guides 2007). With the current technology surge in the running of organisations, the internal auditors have to be kept up-to-date with the technology. This will mean that they are always in loop with any lapses that may occur in the organisation. Risks that affected an organisation a year ago might actually be very different with the risks in the current year. This will mean updates on risks that may affect the organisation have to be made available. Without this the internal auditors might actually be overlooking a potential problem for the organisation and this will be detected by the external auditors which in turn will affect
Protection of the Effectiveness of Internal Audit Function [Name] [Institution] Protection of the Effectiveness of Internal Audit Function The internal audit function is for the internal auditors to independently evaluate if policies and procedures set by management are being followed to the letter…
The control environment provides discipline and structure. Internal controls are more effective when the duties are segregated instead of being performed by the same person. The manager is the employees responsible for overseeing the internal control system.
As the role of the auditor comes increasingly below the highlight pursuing up to date global financial instability, it is believed that it is essential that the accountancy occupation re evaluate the role of audit and guarantee and approach up with positive, realistic approach which both can help in developing and maintain profitable business.
It describes the least provisions for conduct, and behavioural prospect relatively than precise actions. The idea of system of moral values is towards encouraging the moral traditions inside a career of internal auditing. Internal auditing is an autonomous, intention pledge, a consult action considered towards inserting importance as well as progress the organization operation.
In addition, the level of fraud in organizations in public sector and private are increasing, therefore, the companies with good corporate governance emphasize in value in internal control and internal auditing have less likely to be in dangerous in fraud.
This calls for future protection of shareholders and brings attention to the significance of audit processes and its final outcome (Vinten, 2004, p. 13). It is necessary to carry out continuous internal audit with the aim of providing shareholders with adequate information about the financial status of the firm.
Data from remote factories and branches is going to be transmitted to the server through the British Telecom telephone system. By connecting oneself to the internet, an individual is opening himself to attacks on his computer and unauthorized access to his computer from people on the internet or others from within the company.
It's an ongoing evaluation of the financial wellbeing of a company's operations by its own employees. Employees who carry out this function are called internal auditors. (Coyle, 2005)
In an internal audit, the internal auditors determine, assess and supervise an organization's risk management, reporting methodologies, and control practices; at the same time give proposals for advancement.
The main risks for GenCo is that its main supplier, the State Coal Company, has a monopoly over coal supply in the country and that the State Power will retain the balance of shares. According to the agreement the prices will be fixed for the next two years, but a power sales contract for the output of the plant is available for three years.
It is identified promoting the internal audit coverage of these processes is a potential way to achieve greater operational transparency and to gain investor confidence. The major aim of this project is to
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