Internal Audit

Question 1

What is internal audit?

Answer 1

Independent internal appraisal from working a usually large organisation

Question 2

Does the UK GCG stress the need for good internal control?

Answer 2

Yes

(Listed companies without one should reconsider the need annually)

Question 3

Can an internal auditor be completely independent of management?

Answer 3

No

Question 4

How can internal auditors retain objectivity?

Answer 4

1. No involvement in company operations
2. Reporting to an appropriate level management
   E.g. audit committee/board of directors

Question 5

What does internal audit play a key role in?

Answer 5

Organisational risk management

Question 6

6 roles of internal audit

Answer 6

1. Monitoring internal control systems
2. Examining financial and operating information
3. Special investigations
   E.g. suspected fraud
4. Reviewing legal/regulatory compliance
5. Reviewing operational
   Economy
   Efficiency
   Effectiveness
6. Monitoring overall risk management policy for effectiveness