Internal Audit Function Should Be Follow

Failure of internal audit function

1. Internal audit is an independent appraisal function established by the management of an organisation for the review of the internal control system as a service to the organisation. It objectively examines, evaluates and reports on the adequacy of internal control as a contribution to the proper, economic and effective use of resources.

The essentials for effective internal auditing are:

(a) independence

The internal auditor should have the independence in terms of organisational status and personal objectivity which permits the proper performance of his duties (paragraphs 11 to 14).

(b) staffing and training

The internal audit unit should be appropriately staffed in terms of numbers, grades, qualifications and experience, having regard to its responsibilities and objectives. The internal auditor should be properly trained to fulfil all his responsibilities (paragraphs 15 to 26).

(c) relationships

The internal auditor should seek to foster constructive working relationship and mutual understanding with management, with external auditors, with any other review agencies and, where one exist, the audit committee (paragraphs 27 to 37).

(d) due care

The internal auditor should exercise due care in fulfilling his responsibilities (paragraphs 38 to 44).

(e) planning, controlling and recording

The internal auditor should adequately plan, control and record his work (paragraphs 45 to 58).

(f) evaluation of the internal control system

The internal auditor should identify and evaluate the organisation's internal control system as a basis for reporting upon its adequacy and effectiveness (paragraphs 59 to 62).

(g) evidence

The internal auditor should obtain sufficient, relevant and reliable evidence on which to base reasonable conclusions and recommendations (paragraphs 63 to 69).

(h) reporting and follow-up

The internal auditor should ensure that findings, conclusions