External &Internal Audit System


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External &Internal Audit System

  1. 1. Internal And External Auditing 1 Group No-10 Vikas Tiwari Vakul Singh Vivek Singh Indian Business Academy Gr. Noida 4/11/2009
  2. 2. Internal audit and internal control 2 What is internal audit? ‘An independent appraisal service to management measuring and evaluating the effectiveness of the internal control system’ What is internal control? ‘A process established by management to provide reasonable assurance that organizational objectives will be achieved’ 4/11/2009
  3. 3. Purpose of Internal Audit 3 To improve and add value to the activities of  public administration by assessing whether the public resources are  managed in conformity with the principles of economy, effectiveness and efficiency and to provide guidance. Internal audit; provides independent and  objective assurance and consultancy. Is process is performed with a systematic,  regular and disciplined approach in accordance with generally accepted standards. comprises financial, compliance, system,  performance and IT audit is carried out by 4/11/2009 internal auditors.
  4. 4. Certification and Proficiency of Internal Auditors 4 Having a higher education diploma  Administrative or audit experience  Public Internal Auditor Certificate is awarded  upon a series of exams Certificates are graded every three years  according to trainings attended and performance points acquired A higher degree certificate is awarded to those  who hold an internationally recognized certificate A minimum of a hundred hours of professional  training in every three years is required Maintaining and improving level of skills and  knowledge required by the duty 4/11/2009
  5. 5. What is External Audit 5 An external auditor is an audit professional  who performs an audit on the financial statements of a company, government, individual, or any other legal entity or organization, and who is independent of the entity being audited. 4/11/2009
  6. 6. They are distinguished from Internal Audit 6 The internal auditor's primary responsibility  is appraising an entity's risk management strategy and practices, management . Internal audit do not express an opinion on  the entity's financial statements. 4/11/2009
  7. 7. The role of the external audit 7 The external audit should not be a part of  the internal control process The external audit should provide  independent external comment to management on the ‘standards, quality and coverage of internal audit’ The external audit should not duplicate  internal audit work unless grounds for concern The external audit should examine and  comment on both internal control and internal audit quality 4/11/2009
  8. 8. How audits add value 8 Identify and correct noncompliance issues • Identify improvement opportunities in • standards and procedures Value added includes: •  Improved consistency and lower variability  Reduced errors, rework, cycle time, costs  Increased productivity 4/11/2009
  9. 9. 9 you… Thank 4/11/2009
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