Module 5.1: Internal Audit INTRODUCTION TO PUBLIC FINANCE MANAGEMENT Module 5.1: Internal Audit
Internal audit is part of the executive political Parliament External audit Internal audit management Internal control Public Expenditure Analysis and Management Course Zimbabwe 2014
What is Internal Audit? Operationally independent unit checking that internal controls are working properly and making recommendations for optimization of controls. General Financial Inspectorate reviews transactions, accounts and organisations; compliance - financial laws & regulations; corrective – analyse problems & recommend change; reports to the Ministry of Finance.
Module outline Compliance & Systems Audit Features of Internal Audit
Compliance & Systems Audit Compliance with rules and regulations Easier to identify irregularities than poor internal control Systems Examines system of Internal controls, checks and balances
Compliance & Systems Audit Internal audit’s scope should include the entity’s systems, procedures and locations; Internal audit should audit internal control systems, risk management and corporate governance procedures; Plan to cover the most significant (risky) systems each year.
Module outline Compliance & Systems Audit Features of Internal Audit
Features of Internal Audit Independence of Internal Audit Report direct to the Permanent Secretary or Chief Executive; Single department in the Ministry of Finance, headed by a director; Independent of the Accountant General.
Features of Internal Audit Internal Audit requirements There should be a requirement for all organisational units to have/be covered by internal audit. Audits seen as part of internal control & managerial support; Audits pre-planned and agreed except in exceptional circumstances e.g. checking on suspected theft or misuse of assets.
Features of Internal Audit Internal Audit Reports Management reports – not made public Institute of Internal Auditors (IIA) is a global professional body that offers resources and training https://global.theiia.org/Pages/globaliiaHome.aspx
Key messages Internal Audit is part of the Internal Control System. It is a management function. Compliance and Systems Audits are both important. There is a professional body for Internal Auditors.