Many people think of auditing as only “financial” in nature. However, internal auditing has a broader meaning—helping management achieve their mission. The Internal Auditing Department’s mission was derived from the formal definition of internal auditing as promulgated by the Institute of Internal Auditors (IIA). The IIA’s formal definition is as follows:
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.
Based on the above definition, the scope of the internal audit activities includes has assessing whether departments or operating units have established procedures to:
- Ensure results are consistent with established objectives/goals and operations or programs are carried out as planned.
- Ensure economical and efficient use of resources.
- Safeguard assets, and as appropriate, verify the existence of such assets.
- Ensure compliance with policies, plans, procedures, laws and regulations that could have a significant impact on operations and reports.
- Ensure the reliability and integrity of the process to identify, classify, measure, and report such information.
The internal audit function has no authority or responsibility over the activities audited, reviewed or investigated; these remain with management. Therefore such audits, reviews and investigations do not relieve other personnel within the audited area of their responsibilities.