Internal Audit

1. INTERNAL AUDIT

2. Amin Siddiki FCA

3. Amin Siddiki FCA
“We’re here to help!”
Teach + Train = Change
Our goal:
Promote effective, efficient and ethical
practices and procedures

4. Amin Siddiki FCA
Definition An appraisal or monitoring activity established
within an entity as a service to the entity.

5. Amin Siddiki FCA
• Examining, Evaluating and Reporting
• management & the directors
to
• the adequacy & effectiveness of components of the
accounting & internal control systems.
on

6. Amin Siddiki FCA
Who ?
• Employee of the entity
or
• Outsourcing
Why?
• To assist management
/ board in achieving
corporate objectives
• It is a recognised way
of ensuring good
corporate governance.

7. Amin Siddiki FCA
How to assist board / Management
• Acting as auditors for board reports not audited
by the external auditors.
• Being the experts in fields (ie: implementation of
new accounting & auditing standards)
• Liaison with external auditor, Particularly where
external auditor use internal audit work

8. Amin Siddiki FCA
Corporate Governance
• The system of rules, practices and processes by which a
company is directed and controlled. Corporate
governance essentially involves balancing the
interests of the many stakeholders in a company

9. Amin Siddiki FCA
Denominator Internal Audit External Audit
Objective It is an activity designed to
add value and improve an
organisation’s operation
To express an independent
opinion on Financial
Statements
Appointed by Management Shareholders
Responsible
to
Management Shareholders
Relating to Whole operation of the
organisation both financial
and non financial
Concern to the Financial
Statement and related
information
Who they are Usually employee Independent Firm
Difference between Internal and External Audit

10. Amin Siddiki FCA
Activities of Internal Audit
Monitoring internal control
Examining financial & operating information
Review of the economy, efficiency and effectiveness of
operations
Review of compliance with laws, regulations and other
external requirements
Special investigations; ie: Suspected fraud

11. Amin Siddiki FCA
What is this
It is a process
Designed &
effected by
Those Charged
with governance
Management
Other personnel
Works for
To provide
reasonable
assurance
On
Reliability on
financial
reporting
Effectiveness and
efficiency of
operation
Compliance with
applicable laws
& regulations
Internal Control

12. Amin Siddiki FCA
Internal audit to Risk Management
• Internal Audit has a two folds role in relation to risk
management
• Monitoring the company’s overall risk management
policy to ensure it operates effectively
• Monitoring the strategies implemented to ensure that
they continue to operate effectively

13. Amin Siddiki FCA
Internal audit to Internal Control
• Key role of internal audit is to monitor the overall
process and in providing assurance that the systems
meet objectives and operative effectively.

14. Amin Siddiki FCA
Internal audit to operational Audit
• Operational/Management/Efficiency audit is the
operational processes of the organiasation. Their prime
objective is the monitoring of management’s
performance, ensuring company policy is adhered to.
• There are two aspects of an operational assignment:
• Ensure policies are adequate
• Ensure policies work effectively

15. Amin Siddiki FCA
Ensure policy
are adequate
• Internal auditor will
have to review
whether the policies
are adequate or not.
If required advice to
board to improve.
Ensure policies
work effectively
• The auditor will have
to examine the
effectiveness of the
controls by testing.

16. Amin Siddiki FCA