Brink's Modern Internal Auditing

CHAPTER 14 Charters and Building the Internal Audit Function

This chapter and the other chapters in Part Four that follow it cover the essential activities of an internal audit department, through launching an internal audit department, as described in this chapter, to reporting internal audit results through effective audit reports in Chapter 18. This chapter introduces some key practices necessary to build an effective internal audit function, starting with an authorizing charter as well as the basic processes of building, staffing, and managing an effective internal audit department. We start by describing the need to establish a formal internal audit charter, a basic authorizing document that has some common elements no matter whether internal audit is serving a large corporate structure or a smaller not-for-profit entity. This is the audit committee approved document that outlines internal audit’s authority and responsibility to operate within an enterprise.

The chapter discusses other important steps to building an effective internal audit function, including typical internal audit position descriptions and effective organizational structures. No matter the industry, geographic location, or size of the enterprise, all internal audit departments or functions need to follow some of these similar good practice procedures.

Most of this book’s common body of knowledge (CBOK) theme covers technical internal audit areas such as information technology (IT) application control ...