Page 109 - Microsoft Word - 00 P1 IW Prelims.docx

Audit and compliance

Strategic capabilities
Internal audit

1.1 Function and importance of internal audit

Internal audit is a management control reviewing the effectiveness of
controls

 It is part of the control systems of a company, with the aim of
ensuring that other controls are working correctly

 In some regimes, it is a statutory requirement to have internal
audit. In others, codes of corporate governance strongly suggest
that an internal audit department is necessary

 The work of internal audit is varied – from reviewing financial
controls through to checking compliance with legislation.

 The department is normally under the control of a chief internal
auditor who reports to the audit committee.

103