Governance, Risk, and Compliance Handbook: Technology, Finance, Environmental, and International Guidance and Best Practices

CHAPTER 5

THE ROLE OF INTERNAL AUDIT

Frank Edelblut

Hernan Murdock

5.1 INTRODUCTION

5.2 INTERNAL AUDITORS' ROLE THROUGHOUT HISTORY

5.3 THE ROLE TRANSFORMED

5.4 BEYOND ASSURANCE: ADVISORY SERVICES

5.5 ACHIEVING THE GREATEST IMPACT

5.6 THE BRIGHT OUTLOOK OF INTERNAL AUDITING

NOTES

5.1 INTRODUCTION

The role of internal auditors is to provide independent, objective assurance and consulting services to organizations in ways that improve their operations. The main objective is to help management achieve its business goals through a systematic and disciplined approach to evaluating and improving the effectiveness of management, control, and governance processes.1 In this regard, the internal audit function can add value to the organization by identifying exposures and verifying that mitigating controls are designed appropriately and function as intended.

5.2 INTERNAL AUDITOR'S ROLE THOUGHOUT HISTORY

Internal auditing as a practice and profession has a long and curious history. Some date the origin back 5,500 years ago when records of a Mesopotamian civilization showed tick marks to denote the verification of numbers. The history continues through the records of Egyptian, Persian, Hebrew, Greek, and Roman civilizations as well. Interestingly, and unfortunately, the Greeks are believed to have used slaves as auditors because they could torture them to reveal the truth.2

With the fall of Rome and the demise of monetary and control systems, the profession lost some of its prominence. It was ...