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I with aanswer Mr omar almousa
I agree with Mr. OmarAlmousa answe
. We find that some firms tend to be smaller, younger, financially weaker, more complex, growing rapidly, or undergoing restructuring. Firms with more serious entity-wide control problems are smaller, younger and weaker financially, while firms with less severe, account-specific problems are healthy financially but have complex, diversified, and rapidly changing operations. Finally, we find that the determinants also vary based on the specific reason for the material weakness, consistent with each firm facing their own unique set of internal control challenges.
Also Major Types of Audits and Reviews in internal Audit are
1. Financial Audits or Reviews
2. Compliance Audit
3. Operational Audits
4. Department Reviews
5. Information Systems Audits
6. Integrated Audits
7. Investigative Audits or Reviews
8. Follow-up Audits
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Not to forget Health and Safety compliance audits and enviromental audits.
There are six basic types of Internal Audit services:
Types of Audits and Reviews:
A historically oriented, independent evaluation performed for the purpose of attesting to the fairness, accuracy, and reliability of financial data. CSULB's external auditors, KPMG, perform this type of review. CSULB's Director of Financial Reporting coordinates the work of these auditors on our campus.
A future-oriented, systematic, and independent evaluation of organizational activities. Financial data may be used, but the primary sources of evidence are the operational policies and achievements related to organizational objectives. Internal controls and efficiencies may be evaluated during this type of review.
A current period analysis of administrative functions, to evaluate the adequacy of controls, safeguarding of assets, efficient use of resources, compliance with related laws, regulations and University policy and integrity of financial information.
There are three basic kinds of IS Audits that may be performed:
A review of the controls which govern the development, operation, maintenance, and security of application systems in a particular environment. This type of audit might involve reviewing a data center, an operating system, a security software tool, or processes and procedures (such as the procedure for controlling production program changes), etc.
A review of controls for a specific application system. This would involve an examination of the controls over the input, processing, and output of system data. Data communications issues, program and data security, system change control, and data quality issues are also considered.
A review of the development of a new application system. This involves an evaluation of the development process as well as the product. Consideration is also given to the general controls over a new application, particularly if a new operating environment or technical platform will be used.
This is a combination of an operational audit, department review, and IS audit application controls review. This type of review allows for a very comprehensive examination of a functional operation within the University.
This is an audit that takes place as a result of a report of unusual or suspicious activity on the part of an individual or a department. It is usually focused on specific aspects of the work of a department or individual. All members of the campus community are invited to report suspicions of improper activity to the Director of Internal Auditing Services on a confidential basis. Her direct number is.
These are audits conducted approximately six months after an internal or external audit report has been issued. They are designed to evaluate corrective action that has been taken on the audit issues reported in the original report. When these follow-up audits are done on external auditors' reports, the results of the follow-up may be reported to those external auditors.
CHARGES AND RESPONSIBILITIES OF INTERNAL AUDIT:
1. Develop an audit plan to evaluate the institution's financial, operational and EDP controls.
Assess the economical and efficient use of resources.
Determine the level of compliance with established laws, rules, policies and procedures.
Recommend adoption of desirable policies or changes to existing policies.
. Follow-up on the adequacy of corrective actions.
Conduct special projects at the request of the Board.
Investigate cases of misappropriation, misconduct, fraud.
Establish and maintain professional rapport with external auditors and management.
9. Keep Audit Committee and Board fully informed on a timely basis of the activities of the Internal Auditing Department.
10. Follow the Standards of the Professional Practice of Internal Auditing and Code
of Ethics as promulgated by the Institute of Internal Auditors.
AUDIT PROCEDURES
1. The Internal Auditor shall have unrestricted access to all records, personnel, and equipment in carrying out the objectives of an audit.
2. All Board members have unrestricted access to the Internal Auditor. The Internal Auditor has unrestricted access to all Board members. This promotes
3. The Internal Auditor shall develop an audit plan for review and approval by the Audit committee. The audit plan shall be approved annually. The audit plan is based on audit risk areas identified by Board members, top management, external audit results, and internal auditor experience. The Internal Auditor will develop audit objectives and scopes for each audit on the approved audit plan for the president's review and the Audit Committee's review and approval. The audit plan is sufficiently flexible to cover unanticipated demands on the Internal Auditor given the changing college environment, e.g., unanticipated internal audit areas may surface due to external audit results, or evidence of fraud may surface that requires immediate Internal Auditor attention. The Audit Committee shall review and approve a change in the audit plan.
4. The Internal Auditor shall notify the department being audited of the objective and scope of the audit and the timetable for completion of the audit.
5. The Internal Auditor shall perform audits in accordance with generally accepted auditing standards.
The Internal Auditor may perform different types of audits:
a. Full Audit - Normally, full audits are required when an area has never been audited before, or significant changes have occurred subsequent to the last audit. A full audit requires completion of all of the following phases:
Preliminary Survey and Planning
System Documentation
Internal Control Evaluation
Audit Program
Audit Testing
Reports and Conferences
b. General Audit - A general audit usually does not require the completion of all the phases of a full audit. The topics are usually conducted year after year and tend to require the same testing. There is no need to fully document the system and consider the impact of internal controls again - it is only necessary to ensure that the system has not drastically changed since the prior audit.
c. Spot Audit - A spot audit is a periodic audit of a particular transaction at a particular point in time which gives reasonable assurance that controls in place are still working. Results of spot audits may help determine if a full audit should be scheduled. Examples are: an inventory location test, a surprise cash count, or an unannounced payroll distribution.
d. Situational Audit - A situational audit is narrower in scope than a full audit. Its is usually an unanticipated project that may take priority over a planned audit. The focus is usually based on a previously identified specific control weakness, or the likelihood that a weakness not readily identifiable exists. Examples are: a management or Board requested special project, an integrity or fraud related issue.
e. Follow-up Audit - The focus of a follow-up audit is to contact the audited department to determine if previously agreed to recommendations have been implemented. The follow-up audit may require additional testing to ensure that controls are working and effective as anticipated. An attempt should be made to conduct a timely follow-up audit if a previous audit uncovered serious control issues.
f. Opinion - An opinion may be required regarding a specific issue, procedure, or task. It is part of Internal Audit's responsibilities to provide counsel to management. Providing
a professional opinion requires fact-finding research such as reading authoritative texts, holding discussions with key staff, and reviewing results of previous audits as applicable.
Types of Major Audit in Internal Auditing can be define as follows
FINANCIAL AUDIT:-- A historical oriented independent evaluation purpose for reviewing reliability on financial data coordinating with external auditor as well.
OPERATIONAL AUDIT- A future oriented, systematic and independent evaluation of Organisation activities.
DEPARTMENT REVIEW- a current period analysis of administrative functions to evaluate the adequacy of controls.
INFORMATION SYSTEM AUDIT-There are three kind of IS Audit
-General Control Review
-Application Control Review
-System Development Review
INTEGRATED AUDIT-This is a combination of Operational Audit , Department Review and IS Audit.
INVESTIGATIVE AUDIT-This is a Audit take place as a result of a Report of suspicious or unusual activity on the part of individual or Department.
FOLLOW UP AUDIT-These are conducted after approaximately6 months after issuance of Internal and External Audit Report
The major types of internal audits, financial, operating, compliance and information technology
Internal Audit performs compliance, financial, and operations audits, ethics and fraud investigations.
Audit activities may be planned - therefore, an audit engagement may have been scheduled within Internal Audit's plan for performing routine, periodic audits. These types of audits are designed to provide management with assurances of the adequacy of internal controls and operating activities. These audits appraise operations for compliance with laws, policies, procedures, efficiency of operating systems, and the effectiveness of accounting, financial and internal controls.
Some audits may not be part of Internal Audit's prepared audit plan. These unplanned audits may be initiated if, during any audit, there is discovery of a previously unknown business risk or an irregularity. Unplanned audits may also be investigations into wrongdoing, fraud, ethics violations or abuse.
Audit activities, including investigations, will conclude with a report communicating results of the review to key administration, personnel, and others as designated.
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