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. Internal auditors help organizations by identifying inefficiencies, serving as an early warning system, making processes less dependent on individuals, and increasing accountability. The Institute of Internal Auditors establishes standards and principles for internal auditing.

1. Title Lorem
Ipsum
SIT DOLOR AMET

2. 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 (IIA)

3. Benefits of Internal Audit
 Identifies redundancies in operational and control procedures and
provides recommendations to improve the efficiency and effectiveness
of procedures;
 Serves as an early warning system, enabling deficiencies to be identified
and remediated on a timely basis (e.g. prior to external, regulatory or
compliance audits);
 Internal audits make the organization process-dependent rather than
person-dependent;
 Ultimately increases accountability within the organization

4. The International Professional
Practices Framework (IPPF)
IPPF INCLUDES THE FOLLOWING:
 Definition of Internal Auditing
 Code of Ethics
 International Standards for the profession
 Position Papers
 Practice Advisories
 Practice Guides

5. IIA Code of Ethics
Integrity - The integrity of Internal Auditors establishes trust and thus provides the basis for
reliance on their judgment.
Objectivity - Internal Auditors exhibit the highest level of professional objectivity in gathering,
evaluating, and communicating information about the activity or process being examined. Internal
Auditors make a balanced assessment of all the relevant circumstances and are not unduly
influenced by their own interests or by others in forming judgments.
Confidentiality - Internal Auditors respect the value and ownership of information they receive and
do not disclose information without appropriate authority unless there is a legal or professional
obligation to do so.
Competency - Internal Auditors apply the knowledge, skills, and experience needed in the
performance of internal auditing services.

6. Internal Audit vs. External Audit
INTERNAL AUDIT
IIA Standards
Employed by the organization (though
independent of the activities they audit).
Diverse background and skill set.
 Test controls at a significantly lower level of
materiality than do external auditors.
Broad Focus
Organizational efficiencies & effectiveness;
Compliance with laws & policies;
Organizational objectives;
EXTERNAL AUDIT
AICPA Standards
Hired by the organization to provide a specific
service.
Primarily accounting background
Narrow Focus (i.e. accurate financial
statements)

7. What kind of work does Internal
Audits do?
 Audits (Assurance Activities) – Examinations of audit evidence for the purpose of providing an
independent assessment. Audit types include:
 Operational Audit – is a review of an organization’s usage of resources to ensure those resources are
being utilized as efficiently and effectively as possible to accomplish a mission and goal.
 Compliance Audit – is performed to determine if an organization or program is operating in accordance
with policies, procedures, laws & regulations.
 Financial Audit – Most commonly known form of audit and refers to the systematic review of a
company’s financial reporting to ensure all information is valid and conforms to GAAP Standards.
 Investigative Audit – are typically asked for when there is an assumed violation of rules, regulations, or
law.

8. What kind of work does Internal
Audits do?
 Consulting (Advisory activities) – Are generally performed at the specific request of an
engagement client. The nature and scope of the consulting engagement are subject to
agreement with the engagement client. When performing consulting services, the internal
auditor should maintain objectivity and NOT assume management responsibility.
 Assist on special projects;
 Provide feedback or advise on internal controls and risks;
 Investigate fraud or other allegations
 Management requests

9. Characteristics of Internal Auditor
Independence: Internal auditors must maintain independence to objectively assess processes and controls without bias.
Risk Assessment: Identifying and assessing risks to the organization's objectives is a critical aspect of the internal audit role.
Control Evaluation: Evaluating the adequacy and effectiveness of internal controls to mitigate identified risks.
Compliance: Ensuring compliance with laws, regulations, and internal policies and procedures.
Reporting: Communicating findings, recommendations, and observations to management and the board of directors to facilitate informed decision-
making.
Continuous Improvement: Providing recommendations for enhancing processes and controls to improve organizational efficiency and effectiveness.
Monitoring: Monitoring the implementation of audit recommendations and tracking progress over time.
Professionalism: Adhering to professional standards and ethical guidelines while conducting audits and interacting with stakeholders.
Collaboration: Collaborating with other functions within the organization, such as risk management, compliance, and finance, to achieve common
objectives.
Adaptability: Being adaptable to changes in the organization's environment, including new risks, regulations, and business practices.

10. Components of Internal Control

11. Audit Plan Development
Flowchart

14. Thank you