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Internal audit

Internal and external audit

6.1 External and Internal Audit

Role required  Statute, for all limited  Management, usually in
by: companies larger organisations

Appointed by:  Shareholders or directors  Audit committee/CIA

Reports to:  Shareholder (primary  Audit committee/CIA
duty) and management
(professional
responsibility)

Reports on:  Financial statements  Internal controls mainly

Forms  True and fair view and  Adequacy of ICS
opinions on: proper presentation

Scope of  Unlimited, to fulfil statutory  Prescribed by
assignment: obligation management/audit
committee

6.2 Relationship of internal audit to external audit

External auditors should take into account the following when planning their audit:

 Status of internal audit within organisation.

 Scope of internal audit function.

 Whether management act on recommendations of internal audit.

 Technical competence of internal auditors.

 Objectives of internal audit.

 Due professional care demonstrated in internal audit work.

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