The document defines internal audit as an independent function that appraises an entity's operations and suggests improvements to strengthen governance and controls. It discusses the audit universe, scope of internal auditing, and organization lifecycle. Finally, it lists capabilities needed for internal auditors, including knowledge of standards, audit processes, and personal skills like presentation, negotiation, and time management.

1. Professional opportunities in
Internal Audit/
Universe of Internal Audit
- CA Manoj Agarwal @ICAI, Dec 23, 2011 TT

2. Agenda
• Definition of Internal Audit
• Organization Life Cycle
• Defining the Audit Universe
• Internal Audit Capabilities and Needs Survey 2011
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3. Definition of Internal Audit
Institute of Chartered Accountants of India, India defines Internal Audit as
Internal Audit is an independent management function, which involves a continuous
and critical appraisal of the functioning of an entity with a view to suggest
improvements thereto and add value to and strengthen the overall governance
mechanism of the entity, including entity’s strategic risk management and internal
control system.
Institute of Internal Auditors, Inc, Florida defines Internal Auditing as
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
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4. Scope of Internal Audit
Based on the above definition the scope of internal auditing includes:
1. Ensuring results are consistent with established objectives and goals, and operations
or programs are carried out as planned.
2. Ensuring compliance with organizational policies, contracts, laws, and regulations.
3. Appraising the reliability and integrity of financial information by evaluating the means
developed by management to identify, classify, measure, and report such information.
4. Ensuring economical and efficient use of resources.
5. Safeguarding assets.
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5. Organization Life Cycle
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6. Example of Opportunities in Internal Audit
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7. Defining the Audit Universe
Defining the Audit Universe is the first critical step in setting up an Audit
Plan
 The vastness and dynamic nature of the business
 Geographical and demographic spread
The test of completeness of Audit coverage can only be established if the
Audit Universe is defined
• Mapping businesses using financial statements is the first step towards
establishing the extent of the Audit Universe
• Operations/back offices that support these businesses need to be mapped
• Common support/corporate functions of the organisation need to be identified
• The organizational structure should be used to corroborate the businesses
mapped.
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8. “If you think you can do it, or you think you can't do it, You are
right.”
- Henry Ford
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9. Jessica Cox:
Woman Born With
No Arms Becomes
First Pilot to Fly Mark Inglis: Double
Airplane With Feet Amputee Scales Mt. Everest

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11. Internal Audit Capabilities and Needs Survey 2011*`
1. Play a leadership role – Help the organization evolve its risk
management program and internal audit’s role in it.
2. Support the C-suite and board agenda – Work with board
members and executive management to focus on strategic risks,
strategic assumptions and risk appetite.
3. Be prepared for continuous and ongoing change – New laws,
regulations and standards (e.g., IFRS, Dodd-Frank Act) continue to
alter the landscape.
4. Use technology effectively – Improve coverage, reduce costs,
increase frequency and enhance effectiveness.
5. Internal auditing is still about people – Attract, develop and
transfer out the best.
6. Add value – As noted in The IIA’s definition of internal auditing, this
is what internal auditors are supposed to do.
* by Protiviti Inc
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12. General Technical Knowledge
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13. General Technical Knowledge
1 International Financial Reporting Standards (IFRS)
2 Fraud Prevention and Detection in an Automated World
3 Risk management (ISO 31000)
4 Six Sigma
5 Information Security Governance
6 Auditing User-Developed Applications
7 Continuous Auditing
8 Extensible Business Reporting Language (XBRL)
9 Fraud Risk Management
10 Managing and Auditing Privacy Risks
11 Reporting on Controls at a Service Organization –
SSAE 16/AU 324 / SA402*
12 Whistleblower Provisions
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14. Audit Process Knowledge
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15. Audit Process Knowledge
1 Continuous Auditing
2 Computer Assisted Audit Tools (CAATs)
3 Data Analysis Tools – Statistical Analysis
4 Data Analysis Tools – Data Manipulation
5 Auditing IT
6 Fraud – Monitoring
7 Statistically Based Sampling
8 Quality Assurance and Improvement Program (IIA
Standard 1300) Ongoing Reviews (IIA Standard 1311)
9 Marketing Internal Audit Internally
10 Fraud – Fraud Detection/Investigation
11 Fraud – Fraud Risk Assessment
12 Report Writing
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16. Personal Skills and Capabilities
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17. Personal Skills and Capabilities
1 Dealing with Confrontation
2 Presenting (public speaking)
3 Negotiation
4 Leadership (within the IA profession)
5 Developing Outside Contacts/Networking
6 Persuasion
7 High-Pressure Meetings
8 Strategic Thinking
9 Time Management
10 Developing Other Board Committee Relationships
11 Developing Audit Committee Relationships
12 Leadership (within your organization)
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19. Thank You
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