1. DAY 1: OVERVIEW The nature of internal auditing
The internal audit environment
The scope of internal audit work
Standards, principles and practices

2. THE INTERNAL AUDIT ENVIRONMENT
The role of Internal Audit in Corporate Governance
Accountability, management and control in government
Need for internal control
Nature of internal and external audit in government
Linking Internal Audit to other activities
Government internal auditing in Bangladesh

3. THE ROLE OF INTERNAL AUDIT IN CORPORATE GOVERNANCE
Internal audit standards re: governance

4. GOVERNANCE DEFINED
“Enterprise governance is the set of responsibilities and practices exercised by the board and executive management with the goals of:

5. GOVERNANCE DEFINED (cont’d)
Providing strategic direction
Ensuring that directives are achieved
Ascertaining that the risks are managed appropriately
Verifying that the enterprise’s resources are used responsibly”
IT Governance Institute

6. GOVERNANCE DEFINED (cont’d)
“Corporate governance is about promoting corporate fairness, transparency and accountability.”
President of World Bank, June 1999

7. DISCUSSION
How does governance work in NBR?

8. IIA STANDARDS: GOVERNANCE (2130)
“The internal audit activity should assess and make appropriate recommendations for improving the governance process in its accomplishment of the following objectives:

9. IIA STANDARDS: GOVERNANCE (2130) (cont’d)
Promoting appropriate ethics and values within the organization
Ensuring effective organizational performance management and accountability
Effectively communicating risk and control information to appropriate areas of the organization
Effectively coordinating the activities of and communicating information among the board, external and internal auditors, and management.”

10. NEW STANDARD 2130.A1 “The internal audit activity should evaluate
the design, implementation and effectiveness
of the organization’s ethics-related
programs and activities.”

11. WHY IS THERE A NEED FOR INTERNAL CONTROL?
To meet departmental objectives
To guard against specific risks
To help the ministry/department to cope with a changing and challenging environment
To maximize opportunities
To demonstrate accountability
To account for the use of external funds, eg from DFID, EU, World Bank, USAID
Other specific control objectives

12. THE NATURE OF GOVERNMENT AUDITING
External audit:
to provide independent assessments to external stakeholders, (eg Parliament) of the reliability of financial statements, use of funds, strategic and operational performance, and accountability
Internal Audit:
to provide independent assurance, advice and support to the most senior members of the organization, eg Principal Accounting Officer/Chairman, NBR

13. GOVERNMENT EXTERNAL AUDITING
Financial (“Certification”)
Regularity (compliance and probity)
Value for money (economy, efficiency and effectiveness)
Performed by staff of the Office of the Auditor General

14. GOVERNMENT INTERNAL AUDITING
Systems based
Identify strengths and weaknesses of internal controls
Risk management
Performed by officers and staff of the organization

15. GOVERNMENT INTERNAL AUDITING
What makes it different from the private sector?
Different models (eg centralised, decentralised)
International influences:
expectations for government internal audit in member and applicant states;
special requirements for audit of internationally-funded projects
Examples

16. LINKING INTERNAL AUDIT TO OTHER ACTIVITIES
Relationships
With whom?
Why?
How?
See the Manual, 4.4 -
Ministry of Finance
State Audit Office (C&AG)
Other internal audit units
Management
Others? eg other review functions

17. GOVERNMENT INTERNAL AUDITING IN BANGLADESH
Progress so far
Future developments
Guidance: law, policy and mission statement, government rules and orders, draft manual, practices in the ministries

18. QUESTIONS?