Profile/Functions of Unit
Internal Audit is an independent appraisal activity within an organization for the review of accounting, financial and other operations as a basis of service to management. It is a managerial control which functions by measuring and evaluating the effectiveness of other controls.
Functions of Internal Audit:
The Internal Auditor is mainly concern with:
- Evaluation – appraising the effectiveness of the systems in use in relation to the needs of the business and suggestion improvements.
- Compliance – ascertaining whether all the organization financial transactions are recorded in accordance with the policies, rules and regulations as laid down by the management of the organization.
- Verification – Obtaining evidence of correctness of information (e.g. figures) and of the existence and ownership of assets, and confirmation of the liabilities of the organization.
The Internal Auditors scope of work is determined by management and constitute the basis of his audit programme.
Other functions of Internal Audit are:
- Detection of errors, fraud and irregularities
- To prevent errors, fraud and irregularities
- To give a spin-off effect of (2) above
- To assist his clients with the accounting system, taxation, financial and other problems.
The Realm of Internal Auditor
- Financial Audit: Attempts to appraise the accuracy, validity, reliability and fairness of the records, which forms the basis of financial statements to ensure that the transactions which give rise to the records, and the methods of record keeping are in compliance with management policies and statutory requirements.
- Economy and Efficiency Audit (Value For Money Audit): Attempts to determine whether the organization/business entity is utilizing its resources (property, personnel, space and so forth) in an economical manner; and to identify the causes of any inefficiencies, or uneconomical practices including inadequacies of management information systems, administrative procedure or organizational structure.
- Programme Result Audit: attempts to determine whether the desire goals for a particular operation or action are being achieved to prompt consideration for embarking on alternative options which are capable of evaluations of pains, actions and results.