AAF8
NOTICE: Special Offer!

Buy the Premium package NOW (incl. Online classroom + Revision course + Mock exam) and we will extend your subscription until 12th December 2020!

Syllabus C. Internal Control C6. Scope of Internal Audit

C6a. Scope and limitations of Internal Audit

Syllabus C6a)

Discuss the scope of internal audit and the limitations of the internal audit function.

The scope is to give assurances on...

Items such as

  1. Effectiveness of systems

  2. Effectiveness of Internal Controls

  3. Whether manuals are followed

  4. Whether internally produced info is reliable

  5. Compliance with OECD

Oooh nice... What about limitations though?

  • Reporting System

    Reporting to the Finance Director - who is responsible for some of the info being reported on!

    • Action

      Report to Audit Committee instead

  • Scope of Work

    Could be decided by executive directors and thus influenced away from their particular areas (the cheeky monkeys)

    • Action

      Scope decided by chief internal auditor or audit committee

  • Audit Work

    Auditing their own work (Self review threat)

    • Action

      Chief internal auditor doesn’t establish any controls herself
      (see how modern metrosexual I am... ;)

  • Lengths of Service

    Too long in IA and there may well be a familiarity threat

    • Action

      Rotation of work into different areas

      So being an IA is basically just a crazy, roller-coaster of a life..

  • Appointment of Chief Internal Auditor

    Don't let the CEO do it....!

    • Action

      Appointed by the whole of the board or Audit committee