INTERNAL AUDIT FUNCTION – Why Internal Auditing – Costs & Benefits – Implementation Process

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Associate Public Accountant

Certified Financial Auditor

Certified Financial Consultant

WHY INTERNAL AUDIT? Internal Audit helps organizations overcome shortcomings in operating procedures and internal controls, resulting in:

Loss of cash Loss of Equipment, Property, Inventory Proprietary Information Internal or External Theft Collusion Fraud & Embezzlement Policy and Procedure Violations

The Internal Audit Process encompasses three major areas of loss prevention and liability exposure:

Physical Personnel Procedural

Internal Audit enables management to focus on adding value to business.

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Costs & Benefits IA is a Cost Reduction And Efficiency Improvement Activity

Benefits:

Effective control over cash and company assets Effective control over fraud, embezzlement and collusion Behavioral modification of personnel Statements of fraud and liability and/or breach of company policies Controlling employment compensations Identification of positive and negative operation activities Creation of a positive atmosphere for employees about the audit process Utilization of audit findings as a planning & management tool Identification of internal control weaknesses

Costs:

Salaries and associated costs of IA staff

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Internal Audit Process - Risk Based Audit Plan

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Planning Phase

-Formulate audit scope, objectives, timelines & deliverables

-Review of past audit reports

-Understand existing control environment

-Carry out risk assessment

-Based on the risk profile, design & development of audit programs

Fieldwork Phase

-Carry out work in accordance with the plan

-Reviewing financial activity, administrative and business procedures

-Identify areas of risk and concern in internal controls and procedures

Reporting Phase

-Compilation of fieldwork results

-Provide action plans with timeframes to address recommendations

-Process reengineering based on fieldwork

-Final summary report to Senior Management

Follow-up Phase

-Follow up of previous audit recommendations

-Review work plan quarterly to reflect changes in the risk and control profile and the results of recent audits

THANK YOU!

TARIQ A. MIR APA, ACAAssociate Chartered Accountant

Associate Public Accountant

Certified Financial Auditor

Certified Financial Consultant