Internal Audit Charter
Internal Audit Charter
Internal Audit Charter
Table of contents
Forward 1. Introduction................ 1 1.1. Purpose of this charter................... 1 1.2. Internal audit definition..................... 1 1.3. Mission of the internal audit function in Government............... 1 2. Internal audit scope.................................... 2 2.1. Role of Government Internal Audit ................. 2 2.2. Audit Universe ................. 2 2.3. Assurance services.................... 3 2.4. Advisory services ................. 3 3. Establishment and organisation of internal audit units......... 4 3.1. Establishment of internal audit units................. 4 3.2. Supervision by the Office of the GCIA.................. 5 3.3. Discretion of internal audit units at entities............... 5 4. Reporting arrangement............. 5 4.1. Administrative reporting........................... 5 4.2. Functional reporting.................. 6 5. Independence and objectivity .............. 7 6. Responsibility................. 8 7. Coordination with the Office of the Auditor General........... 10 8. Authority............... 10 9. Standards.............. 10 10. The Code of Ethics for Government Internal Auditors...... 10 11. Acknowledgement................11 12. Effective date...............11
2.3. Assurance Services Internal audit provides an objective examination of evidence for the purpose of providing an independent assurance on governance, risk management, and control processes for the organization by conducting the following types of audits: 1) Financial Review: To provide reasonable on the correctness, entirety, legitimacy, and regularity of financial reports and transactions as well as the soundness of underlying internal controls and accounting records. 2) Compliance Audit: To verify adherence to laws, regulations, policies, standards, and prescribed procedures. 3) Performance Audit: To assess the degree of economy, effectiveness and efficiency of the entitys operations. The emphasis is put on the assessment of both entitys inputs and outputs. 4) Systems Audit: To evaluate the design and operation of systems including internal control, financial controls, accounting systems, IT Systems, etc. 5) Forensic Audit: To consider specific cases of suspected irregularities such as fraud, theft, embezzlement, or mismanagement of public funds. 6) IT Audits - Reviews of computer-based systems focusing on data security, disaster recovery, and effective use of resources. 2.4. Advisory Services: Internal audit will also provide advisory services to assist management to meet the entitys objectives. Examples of such services include facilitation, training, research services on prospective issues facing the entity and assisting in improving risk management, internal control and governance structures. The nature, scope and objective of advisory services must be agreed with management.
4. Reporting arrangement
Applicable Standard: 1110 Organisational Independence The Head Internal Audit must report to a level within the organisation that allows the internal audit activity to fulfil its responsibilities Head of Internal Audit administratively reports to the head of the entity to which they belong and functionally to the top management, District Council or Board of Directors (hereafter referred to as the Supervisory Board) as appropriate. 4.1. Administrative reporting is the day-to-day facilitation of operations of the internal audit unit and typically includes:
6.Responsibility
Applicable Standard: 2000 Managing the Internal Audit Activity The Head of Internal Audit must effectively manage the internal audit unit to ensure it adds value to the organisation. The HIA and staff of the internal audit unit have responsibility to: 1) Apply government internal audit policies in conducting internal audit and modify them where the circumstances of individual entity make it necessary;
8.Authority
Internal Auditors at the entity are authorized to: (i) Have unrestricted access to all functions, records, property, and personnel; (ii) Have full and free access to the top management, Board or District Council; (iii) Allocate resources, set frequencies, select subjects, determine scopes of work, and apply the techniques required to accomplish audit objectives; and (iv) Obtain the necessary assistance from personnel in units where they perform audits, as well as other specialized services from within or outside the entity. Internal Auditors at the entity are not authorized to: (i) Perform any operational duties for the entity; (ii) Initiate or approve accounting transactions external to the internal audit unit; and (iii) Direct the activities of any entity employee not employed by the internal audit unit, except to the extent such employees have been appropriately assigned to audit teams or to otherwise assist the internal auditors.
9.Standards
The Internal Audit Units must follow International Standards for the Professional Practice of Internal Auditing as issued by the IIA.
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