Internal_Audit_Performance.ppt - Home Page


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Internal_Audit_Performance.ppt - Home Page

  1. 1. Performance Auditing - Internal Auditing Committee on Performance Excellence, August 18, 2009 Presented by: DAS Chief Audit Executive - Pamela J. Stroebel Valencia, CPA, CIA
  2. 2. Objectives  Introduction to internal auditing;  Comparison of external and internal auditing;  Overview of internal audit’s role in performance auditing;  Governance;  Current state of internal auditing in Oregon State Government.
  3. 3. Definition of Internal Auditing 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 Institute of Internal Auditors, International Professional Practices Framework
  4. 4. Internal versus External  Objectives and Audience vary slightly:  Internal audit’s primary objective is providing information to improve decision making and its audience is Management;  External audit’s primary objective is accountability and its audience is the taxpayer and lawmakers
  5. 5. Internal versus External  Audit work performed is similar:  InternalAuditors are primarily performance auditors;  Most financial auditing is performed by external (i.e. Oregon Audits Division performs Single Audit of Oregon’s CAAFR);  Both may instigate or become involved in special reviews and investigations;  Law and standards require both groups to coordinate and work together.
  6. 6. Performance Objectives  Compliance  Information Technology  Program effectiveness or efficiency  Internal Control  Consulting
  7. 7. Risk-based Performance Auditing  Internal auditors assess risk across their entire organization;  From this risk assessment, audit topics are selected;  Additional criteria may be applied (i.e. last audited, auditable, expertise available, management requests);  The Audit Committee approves the annual risk- based audit plan.
  8. 8. Governance  The combination of processes and structures implemented by the board (management) in order to inform, direct, manage, and monitor the activities of the organization toward the achievement of its objectives.  Internal auditors are required by law and standards to audit Governance.
  9. 9. Governance  It is important for management to be able to link their strategic plan, performance measures, risk assessment, and budget in order to make effective business decisions.  Helping management determine if they are effectively measuring their key strategic objectives accurately can be an important role for internal auditors.
  10. 10. Governance  Governance audit topics may include:  Governance structures, policies, charters  Ethics, culture and values of the organization  Strategic planning and decision making  Performance management/measurements  Risk management structures and policies  Fraud control and policy  Enterprise web page content  Compensation policies and content  Governance, ethics and potential for fraud should be considered in ALL audit engagements.  Internal auditors should work with management to ensure recommendations resulting from audit findings are reasonable, add value and are cost-effective.
  11. 11. Governance of Internal Audit  Agency Audit Committee  Provides oversight and increased independence to the internal audit function.  Statewide Audit Advisory Committee  Mission: Promote excellence and professional, standards-based internal auditing services in state government;  Membership includes: DAS Director, Director of Audits Division, Legislative Fiscal Officer’s designee, and representatives of agency Management, Chief Audit Executive, and private sector.
  12. 12. Internal Audit Capacity in State Government  Currently, 31 state agencies meet the criteria established in Oregon Administrative Rule by DAS which requires an internal audit function (FTE, biennial expenditures, cash processed annually);  28 agencies have an established internal audit function or are meeting the requirement through contracted services.
  13. 13. Questions?  For further information:  Pamela Stroebel Valencia, DAS Chief Audit Executive   503-378-4037 