Who really wants an independent Internal Auditor?

The Institute of Internal Auditors Guidance Standard 1100 – on Independence and Objectivity states that  “The internal audit activity must be independent, and internal auditors must be objective in performing their work”. However, in who’s interest is this independence? Share holders, employees, management or board of directors? All of them right? Yes, until there is an audit finding :-). In fact, the share holders and board of directors are the ones who are really interested in the independence of the internal audit function. Since, they rely on the function to ensure the…

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Corporate frauds rose by over 45 per cent in India in the last two years – Is your Internal Audit function upto it?

As per a recent article in Economic Times Corporate frauds rose by over 45 per cent in India in the last two years and the lurking risk has been dissuading global companies from investing in India, said a study. Corporate frauds arose out of corruption, money laundering, tax evasion, window dressing, financial reporting fraud and bribery due to weaknesses in internal controls, scarcity of resources and over-riding powers of senior management, it added. The study by Assocham and Grant Thornton said companies related t ..  Read more at:http://economictimes.indiatimes.com/articleshow/45889366.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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Report: Independent commission didn’t allow independent auditing

As reported by – watchdog.org http://watchdog.org/192474/independent-commission-didnt-allow-independent-auditing-report-says/ The top internal auditor for a state agency that has a say in your electric bill might have had to choose between keeping a job and telling the honest-to-goodness truth. The chief internal auditor of the State Corporation Commission has been reporting to the chief administrative officer, instead of directly to the agency’s three General Assembly-appointed commissioners. The arrangement sets up a potential conflict of interest, a new audit from the Auditor of Public Accounts says. The chief internal auditor, meant to operate as independently as possible, could have risked putting his…

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Internal report helped Mexico to gets green light: DOT ‘opening door’ to cross-border trucking

Sourced from http://fleetowner.com/http://fleetowner.com/fleet-management/mexico-gets-green-light-dot-opening-door-cross-border-trucking Less than a month after an internal audit concluded a pilot program lacked enough participants to be statistically conclusive, the Dept. of Transportation said Friday that Mexican motor carriers will soon be able to apply for authority to conduct long-haul, cross-border trucking services in the United States. Fully opening the border to approved carriers is “a significant milestone” in the implementation of the North American Free Trade Agreement, according to the DOT statement. The policy change ends a 20-year political dispute over the NAFTA trucking provision, and is…

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Internal Audit touches Football Associations

Internal Audit findings were used by Prince Ali to create the basis for the banning for life from involvement in professional football of former FIFA executive committee member and AFC President Mohammed Bin Hammam. However, he failed in getting the Asian group to act on recommendations of an internal audit conducted by PriceWaterhouseCoopers (PWC) to possibly file criminal and civil charges against the disgraced official and renegotiate if not cancel the AFC’s $1 billion master rights agreement with Singapore-based World Sports Group. The burial of the audit by Bin Hammam’s…

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Why SMEs should embrace financial audits

© Zawya BusinessPulse 2015 © Zawya BusinessPulse 2015A financial audit involves a comprehensive examination of a business’ financial transactions and positions, and is something that large corporations are required to do every year. SMEs are subject to less demanding reporting requirements, but a full annual audit is something that they should still be doing as a matter of course. There are two kinds of auditing – internal and external. An internal audit is so called because it’s conducted by an employee of the company rather than an external auditor. When…

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Embezzlement cases steal cash from most exposed

Sourced from http://www.finditwestvalley.com/politics/embezzlement-cases-steal-cash-from-most-exposed-h49749.html The scheme Batts-Porter is accused of operating was simple, federal officials say. She managed Social Safety payouts in the trustee’s workplace. The workplace was sanctioned by the Social Security Administration to deal with extra than $1 million in payments per year for residents who are incapable of overseeing their finances. Possibly Center Township Trustee Eugene Akers summed it up greatest: “Right here we are once again. Everyone wants to steal from the poor people.” On Friday, federal officials announced criminal charges alleging that Carmen Batts-Porter, the enterprise counselor…

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Professional Practice teams within Internal Audit Functions – Value Add?

Digressing a little, but think it is relevant to audit functions today… The Global Financial Crisis raised a number of questions on how risk management functions were run in financial services and also raised a few questions on the internal audit functions. As a reactive measure the regulators started to pay more attention to the internal audit (IA) departments. In turn the IA departments especially in financial services, setup professional practice functions as an internal check on quality of the function. The professional practice departments were also charged with additional…

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Risk Appetite a new perspective

I was recently working to prepare the audit plan for a client and it got me thinking about risk appetite and is it really used in the right light. External Auditors have always used the concept of materiality as their responsibility is to give a true and fair view of the financials, this concept also allows them to not audit everything in the company and limit the resources needed. When a company uses risk appetite they are also applying the materiality concept to say where the that risk and control…

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Back to Basics – Risk Appetite

I recently found this blog post on IIA website about risk appetite, you can refer to it here http://normanmarks.wordpress.com/2013/09/23/what-is-your-risk-appetite/. The author of the blog has explained risk appetite quite well using driving a car as an example. I feel risk appetite is an important concept that is not always utilised because it is diffcult to explain and put in monetory terms. I have rarely found someone using this concept when discussing audit issues or defining materiality levels for testing. But if you really look at it, the risk appetite is…

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