What should be the mandate of the internal audit function?

The internal Audit Function considers one of the Board of Directors tools that provides assurance regarding internal Controls, Risk management & Governance within an organization.

so, Internal Audit Activity should me mandated through the board of directors & audit committee. 

to audit specific system for its effectivenes and efficiency and to identify its short falls and making recommendations for adjustment were necessary

The basic internal audit fuctions comes from its internal audit defenition itself, as the IIA statement, (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.

The result of internal audit fuctions is, to evaluate and improve the effectiveness of risk management, control, and governance processes. this fuctions include a huge activities which must be adopt by internal auditors through three auditing categories; Operation audit, financial audit and compliance audit, this contained evaluate, assess and manage busniess and non business risks and ensure that all control in its place.

the role of the internal auditor is to make sure that the internal procedures comply with the company's status and the professional regulations and principles, and that the financial information (financial statements) are reliable, comaparable, understandble and relevant.

To provide independent assurance service as well to the Board and management.

To establish internal control/review policies and procedure/develop risk assessment for your organization and audit plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internal auditing is a unique position within a company provides management and audit committee members with valuable assistance, by giving objective assurance on governance, risk management and control processes. For internal audit to be effective, however, the mandate of the internal audit function must be clearly defined, agreed to by all stakeholders, and approved by the board.

Executive management and members of the audit committee are the two key stakeholders in most organizations, so involving them is critical to ensure the internal audit mandate is balanced and meets the needs of everyone in the company. Also, remember that resourcing is driven by the mandate; that is, an incomplete mandate will lead to inappropriate allocation of resources.

The authority of the internal audit department is documented in its internal audit charter. An important area to explore first is the role the internal audit department should have: What services should it provide? What should its priorities be? Discussions with members of the audit committee and management should be held to determine what assurance and consulting services are needed. Exploring what internal audit departments at peer companies are doing can also be useful, and helps ensure that the approved internal audit mandate is current with best audit practice.

The internal audit department must support the audit committee’s responsibilities, so the committee’s charter should be reviewed when defining internal auditing roles and responsibilities. In fact, an annual “alignment review” of the two charters—audit committee and internal audit—is strongly recommended. While the NYSE listing rules require an annual review of the audit committee’s mandate, it is silent regarding internal audit. In my view, reviewing both charters every year makes good business sense, and the internal audit charter and the audit committee charter should be mutually supportive and reinforce their critical relationship.

Please kindly notice that my question is related to the MANDATE of the internal audit fuction not to the audit function purpose. Looking forward for your answers.

To identify and correct (CAPA) gaps and inconsistencies of established QMS.