Focus on: Managing the Internal Audit Function (40–50%)
STRATEGIC ROLE OF INTERNAL AUDIT
Managing the Internal Audit Department
The internal audit director needs to comply with the IIA’s Attribute Standards and Performance Standards, which say that the chief audit executive (CAE) is responsible for properly managing the department so that: (1) audit work fulfills the general purposes and responsibilities approved by senior management and accepted by the board, (2) resources of the internal auditing (IA) department are efficiently and effectively employed, and (3) audit work conforms to these Standards.
Internal Audit Charter
- Basic policy statement under which the internal auditing (IA) department operates.
- Establishes the IA department’s position in the organization’s hierarchy.
- IA department operates independently of all other departments in the organization.
- Describes the organizational status that the director of internal auditing should report to the chief executive officer (CEO) but have access to the board of directors. A dual reporting relationship exists here: reporting administratively to the president or CEO, and reporting functionally to the audit committee of the board of directors.
- Describes the purpose, authority, and responsibility of the IA department.
Mission or Purpose of the IA Department
- Review organization’s activities to determine whether it is efficiently and effectively carrying out its function of controlling in accordance with management’s ...