professional opportunities in internal audit

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Professional opportunities in Internal Audit/ Universe of Internal Audit - CA Manoj Agarwal @ICAI, Dec 23, 2011

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Agenda • Definition of Internal Audit • Organization Life Cycle • Defining the Audit Universe • Internal Audit Capabilities and Needs Survey 2011

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Definition of Internal Audit

Institute of Internal Auditors, Inc, Florida defines Internal Auditing as

Internal auditing is an independent, objective assurance and consulting activity

designed to add value and improve an organization’s operations. It helps an

organization accomplish its objectives by bringing a systematic, disciplined approach

to evaluate and improve the effectiveness of risk management, control, and

governance processes

Institute of Chartered Accountants of India, India defines Internal Audit as

Internal Audit is an independent management function, which involves a continuous

and critical appraisal of the functioning of an entity with a view to suggest

improvements thereto and add value to and strengthen the overall governance

mechanism of the entity, including entity’s strategic risk management and internal

control system.


Scope of Internal Audit

Based on the above definition the scope of internal auditing includes:

1. Ensuring results are consistent with established objectives and goals, and operations

or programs are carried out as planned.

2. Ensuring compliance with organizational policies, contracts, laws, and regulations.

3. Appraising the reliability and integrity of financial information by evaluating the means

developed by management to identify, classify, measure, and report such information.

4. Ensuring economical and efficient use of resources.

5. Safeguarding assets.


Organization Life Cycle


Example of Opportunities in Internal Audit


Defining the Audit Universe

Defining the Audit Universe is the first critical step in setting up an Audit

Plan The vastness and dynamic nature of the business

Geographical and demographic spread

The test of completeness of Audit coverage can only be established if the

Audit Universe is defined • Mapping businesses using financial statements is the first step towards

establishing the extent of the Audit Universe

• Operations/back offices that support these businesses need to be mapped

• Common support/corporate functions of the organisation need to be identified

• The organizational structure should be used to corroborate the businesses

mapped.


“If you think you can do it, or you think you can't do it, You are right.” - Henry Ford

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Mark Inglis: Double Amputee Scales Mt. Everest


Internal Audit Capabilities and Needs Survey 2011*`

1. Play a leadership role – Help the organization evolve its risk management program and internal audit’s role in it.

2. Support the C-suite and board agenda – Work with board members and executive management to focus on strategic risks, strategic assumptions and risk appetite.

3. Be prepared for continuous and ongoing change – New laws, regulations and standards (e.g., IFRS, Dodd-Frank Act) continue to alter the landscape.

4. Use technology effectively – Improve coverage, reduce costs, increase frequency and enhance effectiveness.

5. Internal auditing is still about people – Attract, develop and transfer out the best.

6. Add value – As noted in The IIA’s definition of internal auditing, this is what internal auditors are supposed to do.

* by Protiviti Inc


General Technical Knowledge


General Technical Knowledge

International Financial Reporting Standards (IFRS)

Fraud Prevention and Detection in an Automated World

Risk management (ISO 31000)

Six Sigma

Information Security Governance

Auditing User-Developed Applications

Continuous Auditing

Extensible Business Reporting Language (XBRL)

Fraud Risk Management

Managing and Auditing Privacy Risks Reporting on Controls at a Service Organization – SSAE 16/AU 324 / SA402* Whistleblower Provisions

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Audit Process Knowledge


Audit Process Knowledge

Continuous Auditing

Computer Assisted Audit Tools (CAATs)

Data Analysis Tools – Statistical Analysis

Data Analysis Tools – Data Manipulation

Auditing IT

Fraud – Monitoring

Statistically Based Sampling Quality Assurance and Improvement Program (IIA Standard 1300) Ongoing Reviews (IIA Standard 1311) Marketing Internal Audit Internally

Fraud – Fraud Detection/Investigation

Fraud – Fraud Risk Assessment

Report Writing

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Personal Skills and Capabilities


Personal Skills and Capabilities

Dealing with Confrontation

Presenting (public speaking)

Negotiation

Leadership (within the IA profession)

Developing Outside Contacts/Networking

Persuasion

High-Pressure Meetings

Strategic Thinking

Time Management

Developing Other Board Committee Relationships

Developing Audit Committee Relationships

Leadership (within your organization)

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Thank You

professional opportunities in internal audit

Education