CHAPTER 8 Performing Effective Internal Audits

The many chapters of this book outline our internal audit common body of knowledge (CBOK) and cover all aspects of modern internal auditing, including basic internal control standards, communicating with the board of directors' audit committee, and performing specialized internal audits in such areas as IT cybersecurity controls. This chapter goes through the basic steps and processes necessary to plan, perform, and complete individual internal audits. While internal audit organization matters are covered in other chapters, we will start this chapter with the assumption that an enterprise has an effective internal audit function, supported by an approved audit charter authorizing the function, as well as audit committee approval for an annual plan of internal audit activities as discussed in Chapter 14. This chapter will go through the internal audit steps necessary to perform an internal control review. Virtually all internal audits start with a reaffirmation of initial audit objectives, the development of a detailed individual audit plan, and then the actual internal audit, including the initial assessment review and the documentation of internal controls, tests to determine that key controls and other facilities are working as expected, and subsequent reports on the results of the audit. While other chapters discuss many different internal audit activities, this chapter describes one of internal audit's core CBOK requirements. ...

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