Internal Audit - Brief

Internal audit consists of a combination of assurance and consulting activities.

Internal audit activities can be performed by qualified employees of organizations or by outsourced qualified professionals or entities.

Internal audit takes part within organizations such as division, department or unit.

Internal audit can help organizations to accomplish their objectives by evaluating and improving risk management, control and governance systems.

Internal audit activities can help an organization better by bringing a systematic and disciplined approach.

The scope of internal audit must be wide as much as possible. It is necessary because of the fact that, almost the operations of organizations may involve a part of risk management, internal control or governance.

Having wide audit scope provides efficiency of audit.

Internal audit activities can be claasisfied in two main headings such as assurance and consulting.

The assurance activities mean that, presenting wievs and opinions by an internal auditor through evaluating objectively the findings related the proceeds, systems or other activities of organization.

The assurance services are all performed in accordance with the annual plan.

The consulting services comprise the conclusions such as recommendations.

The consulting services are usually performed in accordance with a special demand of the audited party.

Internal audit activities have two basic requirements. First one is to perform by an organizational independency unit within the organization of the company and the second is individual objectivity.

The independency and objectivity of internal audit department can be achieved in being depend a managment level which has enough authurity providing to perform effectively the internal audit activities through a wide scope possible. This management level is preferred to be Board of Executives or Audit Committee.

The other requirements of internal audit are these; having a formal charter, performing activities within a plan, having qualified teams and also having a quality improving process.

The charter of internal audit is prepared by chief executive of audit (CEA) and approved by audit committee and board of executives.

The charter of internal audit must be comprised at least; mission, objectives, scope, authorities and responsibilities of internal audit activities.

Annual audit plan must be prepared by CAE (chief audit executive) and also must be approved by audit committee.

Audit plan must be prepared in accordance with objectives of organization.

While preparing the audit plan CAE (chief audit executive), must consider objectives of organization, wievs of managers and also risk assesments.

Internal audit plan olso comprises performance criterias. Achievement level of accordance with annual plan shows the audit departments performance level.

The audit plan must comprise at least; objectives and scope of audit, work shedules of the engagements, human resources plans, financial budget informations and also annual report informations.

It will increase the effectiveness of internal audit activities that preparing the audit plan and also performing internal audit activities through focus on risks.

Internal audit department or unit submit regularly their reports, comprised conclusions of audit activities, to the senior managers.

The audit reports must comprise at least, scope, objective and results of engagement, wievs of the auditeds, wievs of the auditors and also recommondations of the auditors.

The internal audit reports may be prepared for each situation such as interim report, brief report, final report and special report.

The auditors who perform the audit activities must be qualified enough for engagement. This is required for each auditors as well as whole audit department. This kind of qualification will ensure respectability of auditors and audit department.

Serkan GÜL