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Although internal auditors are part of company management and paid by the company, the primary customer of internal audit activity is the entity charged with oversight of management's activities. This is typically the audit committee, a committee of the board of directors. Organizational independence is effectively achieved when the chief audit ...
Internal control is a key element of the Foreign Corrupt Practices Act (FCPA) of 1977 and the Sarbanes–Oxley Act of 2002, which required improvements in internal control in United States public corporations. Internal controls within business entities are also referred to as operational controls. The main controls in place are sometimes ...
An internal auditor is responsible to the Board functionally and administratively to the management of the company, and the auditor submits the report to the Board. Their job description is said to include financial record examination, compliance analysis, risk management, and theft and fraud detection skills, along with good communication. [2]
Information is of key importance to organize, prepare and perform internal audits. Independent auditors are generally granted full access to any and all information they require to discharge their responsibilities. Reasonable restrictions would be limited to things such as personal information in personnel records such as health information.
Programming independence essentially protects the auditor's ability to select the most appropriate strategy when conducting an audit. Auditors must be free to approach a piece of work in whatever manner they consider best. As a client company grows and conducts new activities, the auditor's approach will likely have to adapt to account for these.
Institute of Internal Auditors best practice: [4] “In India, Section 177 of the Companies Act, 2013 mandates that the Board of Directors of every listed company, and certain other prescribed classes of companies, must constitute an Audit Committee. This committee is required to have a minimum of three directors, with the majority being ...
To help internal auditors implement these professional practice standards, The IIA produces authoritative guidance developed with the assistance of professional internal auditors with diverse, global expertise. Guidance is created through a rigorous process to assure its applicability to a wide range of internal audit functions around the world.
The standards cover various areas of auditing, including respective responsibilities, audit planning, Internal Control, audit evidence, using the work of other experts, audit conclusions and audit reports, and standards for specialized areas.