Internal Audit Flashcards
(16 cards)
What is the primary function of internal auditing?
To test controls in all areas and evaluate efficiency of operations
Internal auditing focuses on compliance with laws and regulations, prevention and detection of fraud, and risk management.
Who does an internal auditor typically report to?
Board / management within the structure
Who does an external auditor typically report to?
Shareholders / members outside the structure
What is the main objective of external auditors?
To add credibility and reliability by giving an opinion on the financial report
What is the main objective of internal auditors?
1: Compliance with laws and regulations
#2: Prevention and detection of fraud
#3: Risk management
What areas do external auditors cover in their audits?
Financial report and financial report risk
What areas do internal auditors cover in their audits?
All risks
What is the responsibility of external auditors regarding the issues they report?
Report problems but do not improve on them
What is the responsibility of internal auditors regarding the issues they report?
Need to implement improvement by management
Fill in the blank: Internal auditors commonly ________ their audits to ensure independence.
outsource
What are some activities of internal auditors?
- Evaluating controls and advising managers at all levels
- Evaluating risks
- Analysing operations
True or False: The scope of internal auditing is narrower than that of external auditing.
False
What is a key focus area of internal auditing?
Efficiency of operations
What does internal auditing help to prevent and detect?
Fraud
True or False: Internal auditors are usually independent of the company.
False
Fill in the blank: Internal auditors need to know _______ to implement appropriate controls.
risks
