Transcript Slide 1
A c c o u n t a i d TM
Accounting for Aid. Aid in Accounting
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CONTENTS
What is internal audit?
Scope & nature of internal audit
Benefit of internal audit
Frequency of internal audit
Fees on internal audit
Internal audit in NGOs
Who can be internal auditor
Relying on the work of internal auditor
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INTERNAL AUDIT : MEANING
It is independent appraisal activity for review of
Accounting
Financial &
Other operation as basis of
•
•
Protection
Constructive service to the management
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NATURE & SCOPE
Nature
Not a function of authorization & recording
Function starts only after authorization
Scope
The scope is as determined by the management
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BENEFIT
Helps to ensure functioning of ic system
Ensure only genuine expenses are accounted
Meet the legal compliances
Minimize the occurrence of fraud & error
Ensure the existence of internal check
Tool of achieving control on all activities of organisation
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BASIC PRINCIPLES OF
ESTABLISHMENT
Should have independent status in organization
Should be free from executive function
Can investigate any phase of activity at any time & under any
circumstance
Must have clear understanding of the objective
Staffs should be adequately qualified
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AUDIT FEES
It depends upon
Size of the audit team
Seniority of the audit team
Complexity of the work
Frequency of reporting
Regional dispersion
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FREQUENCY
The frequency depends upon
Terms of reference & needs
Structure of organisation
May be on
Monthly basis
Quarterly basis
Half yearly basis
It may be carried on periodical or continuous basis
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INTERNAL AUDIT IN NGOS
It is quite different from corporate internal audit
It depends upon the size & complexity of NGOs
If NGOs crosses 5 crore it is considered essential
NGOs generally prefer a firm familiar with their
environment & operating conditions
In NGOs same ca firm can carry internal & statutory audit
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WHO CAN DO INTERNAL
AUDIT
Management appoints internal auditor
May be an employee or outsider
Large organisations have system of internal audit as internal
part of IC system
Ca firms also provide this service
Professional expertise & exposure
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RELYING UPON INTERNAL
AUDITOR
SA 610 as issued by ICAI prescribes circumstances to rely on
work of internal auditor
Scope of internal audit
Qualification of the internal auditor
Experience of the internal auditor
Procedure followed by him
Action taken by the management
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CONCLUSION
Internal audit is independent exam of the IC system
It is conducted to evaluate the execution & effectiveness of the
IC system
Procedure of audit is independent
However auditor may be dependent or independent
Reporting is to be done to the C.E.O. Or the audit committee if
any
More information please refer AccountAble 133
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FURTHER READING
AccountAble 133: Internal Audit
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