Presentation Chapter 8

Presentation Chapter 8 - Internal Auditors Roles and...

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Click to edit Master subtitle style Internal Auditors’ Roles and Responsibilities Chapter VIII
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Click to edit Master subtitle style Chapter Objectives: • Understand the importance and value-added nature of the internal audit function. • Review the qualities of an effective internal audit department. • Discuss the role of internal auditors as assurance providers and consultants. • Review the trends of the internal auditing profession. • Discuss the relationship of internal audits and the audit committee. • Analyze the determinants of an effective internal audit. • Discuss the professional practices framework (PPF) adopted by The Institute of Internal Auditors (IIA). • Promote the best practices and internal audit framework.
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Click to edit Master subtitle style Key Terms Chief audit executive (CAE) Committee of Sponsoring Organizations of the Treadway Commission (COSO) Foreign Corrupt Practices Act (FCPA) of 1977 Institute of Internal Auditors (IIA) Standards for the Professional Practice of Internal Auditing (SPPIA) Video ( VIDEO)
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Changing Definitions of Internal Auditing Internal auditors have made an impressive progress during the past several decades. To gain an appreciation of this progress, let’s compare definitions of internal auditing as provided by the IIA initially in 1947, and subsequently in 1981 and 1999. 44
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Click icon to add table Changing Definitions of Internal Auditing (cont.) 1947 1981 1999 Independent appraisal activity within an organization for the review of accounting, financial and other operations as a basis for protective and constructive service to management [emphasis added]. An independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization [emphasis added]. 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 [emphasis added]. 55
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Important Improvements in the Definition of Internal Auditing 1. The term “service” implies that internal auditing is a staff rather than a line activity within the organization. 2. There is a shift from “serving management” to “serving the organization” to finally “an integral component of corporate governance as a separate value-added function”. 3. The focus of internal auditing has shifted away from appraisal and compliance activity toward objective assurance and consulting activities. 4. The role of internal auditors has changed from providing management with input and objective feedback to directly participating in decision-making. 5.
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Presentation Chapter 8 - Internal Auditors Roles and...

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