According to the Institute of Internal Auditors, Internal Auditing could be defined as "an independent, objective assurance and consulting activity designed to add value and improve an organisation's operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes". Internal auditing, which is therefore a process, usually involves three distinct identities: "the process owner" (who owns the company), "the internal auditor" (the person who is delivering his evaluation), "the user" (who is going to use the evaluation). The goal of an operational auditing is to ensure that financial reporting complies with the accounting principles broadly accepted. Compliance is therefore a key concept in operational auditing. "Audits based on compliance focus on the adequacy and effectiveness of management controls governing adherence to external laws and regulations" (definition of compliance given by COSO, The Committee of Sponsoring Organizations of the Treadway Commission).
What is the relation between internal control and internal auditing ?
The institutional framework for internal auditing.
Code of ethics.
Standards for performing internal auditing.
Operational audit and frauds.
What is a fraud?
Management fraud programs.
Extraits de l'exposé
[...] I - DESCRIPTION OF INTERNAL AUDITING FUNCTIONS Who uses Internal Auditing/ Who performs it? Internal Auditing definition "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" (The Institute of Internal Auditors). Who uses it? Who performs it? Internal auditing is accomplished in every company. This activity is compulsory and is legally defined. [...]
[...] The persons who makes an internal auditing endorse and are hold responsible if there is a mistake. Internal Audit as well as Internal Control assess the system Internal auditors play a leading role in assessing control systems and participate to its effectiveness. Indeed, internal auditors enjoy a situation of power that enable them to be listened. Internal auditing may be done by a company like the big four (Deloitte, PricewaterhouseCoopers, Ernst&Young . ) in order to ensuring the compliance with the internal control. [...]
[...] ) in 2001, International Academic Accounting has been reconsidered. In fact, there has been an update of the standards in December 2003. They have been effective since January 2004. They were on one hand aimed to thwart the loss of confidence generated by the scandals and on the other hand to reinforce the quality of financial information. In the United States, a new law was enacted: Sarbanes-Oxley Act to contend for frauds. Sarbanes-Oxley Act has had a strong impact on operational auditing and has implied major changes on the way operational auditing was fulfilled. [...]
[...] An operational auditing must abide by the Financial Accounting Standards Board (FASB). The role of FASB is an essential body since it is "the designated body in the private sector responsible for establishing and improving standards of financial accounting and reporting for non- governmental public and private enterprises, including small businesses" (Sources: FASB). The missions of FASB, implemented in 2003, is to ensure an homogenisation of the way to conduct financial reports by establishing standards. "The mission of the Financial Accounting Standards Board is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information" (Sources: FASB). [...]
[...] (2005), "Auditing in the United States: A Historical Perspective", Abacus Vol No 8-Web Site of the Financial Accounting Standards Board http://www.fasb.org/ Web Site of PricewaterhouseCoopers http://www.pwc.com/extweb/service.nsf/docid/014e4577680d069185256d8f007cc38b "PricewaterhouseCoopers' State of the Internal audit profession study: internal audit post Sarbanes-Oxley" (2006). 10- Schipper Katherine, (2005) "The Introduction of International Accounting Standards in Europe: Implications for International Convergence", Financial Accounting Standards Board, European Accounting Association. [...]