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Factors that affect the need for internal audit
The scale, diversity and The larger, the more diverse and the more
complexity of the company’s complex a range of activities is, the more
activities there is to monitor (and the more opportunity
there is for certain things to go wrong).
The number of employees As a proxy for size, the number of employees
signifies that larger organisations are more
likely to need internal audit to underpin
investor confidence than smaller concerns.
Cost/benefit Management must be certain of the benefits
that will result from establishing internal audit
and they must obviously be seen to outweigh
the costs of the audit.
Assurance and advice on risk Directors may wish to have the comfort that
and control there is ongoing monitoring of the
organisation to help them discharge their
responsibilities.
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