Audit in Action Essay

714 WordsAug 6, 20123 Pages
Case-Wk5 AC562 2/5/12 * What is the correct relationship of internal audit to senior management? In the infancy of the internal audit profession the function was more one dimensional. Internal audit was considered the eye and ears of management. The reporting done back then was not to senior management but rather the controller, who was keen on control functions. The position has grown and evolved encompassing a broader role, as the adapted definition from IIA shows: “Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes”. The correct internal audit relationship is one in which the auditor is able to function per the definition and standards governing the role. Therefore the auditor should report to a level within the organization that grants internal audit the ability to do the job without hindrance. The standard speaks to purpose, authority and responsibility with organization independence while Professional Practices advisory contends that internal audit should report to a audit committee and for administrative activity to senior management within the organization. * How should conflict be managed? Is conflict inevitable? Conflicts should be handled immediately once it’s identified. The Institute of Internal Auditors defines a conflict of interest in its International Professional Practices Framework Standards Glossary as “Any relationship that is, or appears to be, not in the best interest of the organization. A conflict of interest would prejudice an individual’s ability to perform his or her duties and responsibilities objectively.” The conflict resides in a

More about Audit in Action Essay

Open Document