scholarly journals Planning and conducting internal audit in practice in the private sector

2020 ◽  
Vol 14 (2) ◽  
pp. 52-74
Author(s):  
Zorica Jović
Keyword(s):  
Private Sector ◽  
Action Plan ◽  
Sample Selection ◽  
Internal Audit ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Data Collection Process ◽  
The Individual ◽  
Audit Sampling ◽  
Insight Into

During the data collection process to understand and assess risk, internal auditors gain significant insight into operations and opportunities for improvement that can be extremely beneficial to the organization. This paper presents valuable insights into practical work that will assist internal auditors in the process of planning and conducting internal audit in the private sector. In the process of internal audit, it primarily starts from planning through the creation of an audit universe that includes a list of all potential audits based on risk and exposure assessment. The chief audit executive develops an annual action plan based on the audit universe. The annual plan should be broken down into four quarters and each defined audit should be arbitrarily assigned to one quarter. The beginning of the process of the planned audit begins with preparatory activities that include defining the objectives of the individual audit, preparation of a detailed schedule of the individual audit, conducting a preliminary survey. What follows is that audit sampling techniques (defined as the application of audit procedures to less than 100% of items within a class of transactions or account balance so that each sample unit has a chance to be selected) perform sample selection from the population. According to the selected model, the audit is approached on the basis of which the opinion of the internal auditor is issued in the created engagement report.

scholarly journals Examining Types of Audit Judgment and Objectivity Threat: Empirical Findings from Public and Private Sector Internal Auditors in Malaysia

2020 ◽  
Vol 2 (2) ◽  
pp. 91-104
Author(s):  
Fazlida Mohd Razali
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Cognitive Biases ◽  
Internal Audit ◽  
Success Factor ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Audit Judgment ◽  
Significant Difference ◽  
The Impact

Increasing number of litigation suits against internal auditors has proved that there is heightened scrutiny on the quality of internal auditor’s judgment. As internal auditor’s judgment relies highly upon by the stakeholders, this paper aims to identify the types of audit judgment deemed to be critical for the success of an audit engagement. It also explores the types of objectivity threat experienced by Malaysian internal auditor. The present study also examined if there had been significant difference between objectivity threat experienced by public sector internal auditors and those of the private sector. The paper opted for an exploratory study using the questionnaires. A total of 150 copies of questionnaire were distributed to internal auditors working in private and public sectors. The findings indicated risk judgment (judgment on existing and emerging risk faced by organisation) as the most critical success factor in internal audit engagement. The findings also revealed that social pressure, cognitive biases, and intimidation as the top three threats that could threaten internal auditor objectivity, thus possibly affect internal auditor ability to make an objective judgment. However, this study found that there was no significant differences between the objectivity threats experienced by internal auditors in the private sector and those in the public sector. The research extent internal auditing literatures which focuses on the factors influencing internal auditor’s objectivity, but tended to omit the impact of the objectivity on influencing internal auditor’s judgment. This study has provided evidence of potentially serious risk of objectivity threats that may impair the internal auditors’ objectivity, thus reducing their ability to make an objective judgment. This paper fulfils an identified need to study flaws in internal auditor’s judgment and the existences of objectivity threat in Malaysian internal audit environment regardless either in public or private sector.Increasing number of litigation suits against internal auditors has proved that there is heightened scrutiny on the quality of internal auditor’s judgment. As internal auditor’s judgment relies highly upon by the stakeholders, this paper aims to identify the types of audit judgment deemed to be critical for the success of an audit engagement. It also explores the types of objectivity threat experienced by Malaysian internal auditor. The present study also examined if there had been significant difference between objectivity threat experienced by public sector internal auditors and those of the private sector. The paper opted for an exploratory study using the questionnaires. A total of 150 copies of questionnaire were distributed to internal auditors working in private and public sectors. The findings indicated risk judgment (judgment on existing and emerging risk faced by organisation) as the most critical success factor in internal audit engagement. The findings also revealed that social pressure, cognitive biases, and intimidation as the top three threats that could threaten internal auditor objectivity, thus possibly affect internal auditor ability to make an objective judgment. However, this study found that there was no significant differences between the objectivity threats experienced by internal auditors in the private sector and those in the public sector. The research extent internal auditing literatures which focuses on the factors influencing internal auditor’s objectivity, but tended to omit the impact of the objectivity on influencing internal auditor’s judgment. This study has provided evidence of potentially serious risk of objectivity threats that may impair the internal auditors’ objectivity, thus reducing their ability to make an objective judgment. This paper fulfils an identified need to study flaws in internal auditor’s judgment and the existences of objectivity threat in Malaysian internal audit environment regardless either in public or private sector.

scholarly journals Internal Audit Functions: An Empirical Study of Public and Private Sectors in Nigeria

2018 ◽  
Vol 2 (1) ◽  
pp. 26-37
Author(s):  
Abdulkadir Madawaki ◽  
Aidi Ahmi ◽  
Halimah @ Nasibah Ahmad
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Internal Audit ◽  
Audit Fees ◽  
Public And Private ◽  
Internal Auditor ◽  
Internal Auditors ◽  
External Auditors ◽  
The Public ◽  
Private And Public

The study examines the similarities and differences between the private and public sectors internal audit functions in Nigeria. The features examined include the hierarchical position of the internal audit functions, outsourcing of internal audit activities, reporting relationship of the internal auditor, and the coordination between internal and external auditors. A survey of internal audit managers of both sectors was undertaken to establish their current practices. The results revealed that there are no much differences in the hierarchical positioning of the internal audit function in both sectors. A substantial difference was found in the reporting lines of internal auditors in both sectors. The results further showed that private sector outsources internal audit activities more than the public sector and a slight difference exists between the two sectors about the level of coordination between internal and external auditors. Finally, the result indicated that private sector experiences a reduction in external audit fees compares to its counterpart in the public sector.      

scholarly journals DETERMINAN EFEKTIVITAS AUDITOR INTERNAL PEMERINTAH (Studi Pada Kantor Inspektorat Provinsi Maluku Utara)

2018 ◽  
Vol 14 (1) ◽  
pp. 55
Author(s):  
Irfan Zamzam ◽  
Suriana AR Mahdi
Keyword(s):  
Career Path ◽  
Internal Audit ◽  
Top Management ◽  
Management Support ◽  
Professional Expertise ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Top Management Support ◽  
Quality Of Work

This study examines the determinants of the effectiveness of internal auditors at the Office of the Inspectorate of North Maluku. Specifically, this study tests; influence of professional expertise, quality of work, independence, perceived career path and top management influence of internal auditor on the effectiveness of internal audit. Analysis was conducted by using multiple regression analysis from 43 respondents. The results showed that; Professional expertise, quality of work, independence and career path affect the effectiveness of internal audit while top management support does not influence the effectiveness of internal audit.

scholarly journals قواعد السلوك المهني للمراجعة ودورها في تطوير الممارسة المهنية للمراجعة الداخلية بالمصارف السودانية

2021 ◽  
Vol 33 (1) ◽  
pp. 52-75
Author(s):  
د. حسن عوض حسن خالد
Keyword(s):  
Professional Practice ◽  
Professional Ethic ◽  
Internal Audit ◽  
Internal Auditor ◽  
Professional Performance ◽  
Internal Auditors ◽  
The Relationship

The problem of the study represented in lack of interest of some internal audit managements in Sudanese banks in implementing professional ethic rules of audit and to its advantages in developing professional practice of internal audit. The study aimed to encourage internal audits management in banks for implementing audit’s standards and professional ethic rules, study the relationship between professional ethic rules of audit and professional performance of internal audit and developing it. The study found several results, among which is that, the independence of internal auditor when planning for auditing distributes in developing professional practice of internal audit, the study recommended several recommendations, among which is that, need for increasing the awareness of internal auditors in Sudanese banks for internal audit’s professional ethic rules and its importance of implementing it.

scholarly journals Peran Internal Audit dalam Implementasi Enterprise Risk Management berupa Pelaporan Kerusakan Prosedur Risiko.

2020 ◽  
Vol 14 (2) ◽  
Author(s):  
Indarti Indarti
Keyword(s):  
Risk Management ◽  
Internal Audit ◽  
Enterprise Risk Management ◽  
Audit Committees ◽  
Corporate Risk Management ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Enterprise Risk ◽  
Management Procedures ◽  
Corporate Risk

Implementation of Enterprise Risk Management (ERM) by Internal Audit in an orga-nization or company becomes important because Internal Audit is expected to help the organization achieve its objectives by approaching systematic and discipline to evaluate and improve the effectiveness of risk management, control, and governance process. As for which affects it is the involvement of internal auditors, the relation-ship of the audit committee with the internal auditor, and ERM.This study aims to analyze the involvement of Internal Audit in Enterprise Risk mana-gement implementation. Internal auditors should assist both management and audit committees in risk management responsibilities and supervisory roles by examining, evaluating, reporting and recommending improvements to the adequacy and effec-tiveness of risk management processes. An interesting issue is whether internal auditors involved in corporate risk management have a link to the willingness of internal auditors to report to the audit committee.The population in this study are the internal auditors and audit committees who working in companies manufacturing and financial services. The reason for determining the company is because the researcher wants to know how internal audit is involved in ERM implementation on that entity. The sample used in this research is internal auditor at private company and at Banking in this case internal auditor at local bank.The analytical method used is multiple regression analysis with SPSS version 23 pro-gram. The analysis technique used in this research is descriptive statistical analysis, classical assumption test, F-statistic hypothesis test to test influence together with 5% confidence level and use t-statistics to test partial regression coefficients. This re-search was conducted to analyze how much influence the role of Internal Audit in applying Enterprise Risk Management in the implementation of Audit.The result of this research is that the high level of internal auditor involvement in Enterprise Risk management implementation has no significant and significant im-pact on reporting of damage to risk management procedures. This indicates that the role of internal auditors in corporate risk management does not affect the reporting of damage to corporate risk management procedures. While the characteristics of strong relationships between internal auditors and audit committees positively and significantly influence the reporting of risk procedures, this indicates that internal audits that have strong internal audit-audit committee relationships strongly support internal auditors who have high involvement to report damage Greater risk procedures.

scholarly journals DETERMINAN EFEKTIVITAS AUDITOR INTERNAL PEMERINTAH (Studi Pada Kantor Inspektorat Provinsi Maluku Utara)

2018 ◽  
Vol 14 (1) ◽  
pp. 55
Author(s):  
Irfan Zamzam ◽  
Suriana AR Mahdi
Keyword(s):  
Career Path ◽  
Internal Audit ◽  
Top Management ◽  
Management Support ◽  
Professional Expertise ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Top Management Support ◽  
Quality Of Work

This study examines the determinants of the effectiveness of internal auditors at the Office of the Inspectorate of North Maluku. Specifically, this study tests; influence of professional expertise, quality of work, independence, perceived career path and top management influence of internal auditor on the effectiveness of internal audit. Analysis was conducted by using multiple regression analysis from 43 respondents. The results showed that; Professional expertise, quality of work, independence and career path affect the effectiveness of internal audit while top management support does not influence the effectiveness of internal audit.

Financial Misappropriation in the Nigerian Public Sector: A Determination of the Role of the Internal Auditor

2017 ◽  
Vol 3 (2) ◽  
pp. 7-17
Author(s):  
J. K. Oyadonghan ◽  
S. Ogoun
Keyword(s):  
Public Sector ◽  
Research Effort ◽  
Internal Audit ◽  
The State ◽  
Least Square ◽  
Primary Data ◽  
Economic Management ◽  
Internal Auditor ◽  
Internal Auditors ◽  
The Public

The continued search for a solution to the problem of poor economic management due to financial misappropriation in the public sector, and the public’s outcry against internal auditors because of their perceived connivance necessitated the current study. Furthermore, the position canvassed by internal auditors with respect to their scope of responsibility further justified the need for this research effort. Accordingly, this study was undertaken to determine, whether or not, the internal auditor has a role to play in ensuring the proper utilization of the nation’s economic resources, bearing in mind the rules specifying the scope of the internal audit function in the public sector. Drawing from the research model of survey design, both a structured questionnaire and oral interview data collection platforms were deployed to collect primary data from audit, and another staff of selected ministries in the State and the least-square regression analysis was adopted in testing the hypotheses. From the analysis, and from personal interview, the researchers were able to find out that internal audit has a responsibility to detect and prevent financial misappropriation in the public sector. It was also found out that the internal auditors in the State Civil Service are not independent, which affects their freedom to report such acts of financial misappropriation to the legislative arm for proper action. Therefore, it is recommended that The State legislative arm should ensure that the independence of the internal auditor is guaranteed by a statute.

External Auditor Evaluations of Outsourced Internal Auditors

2010 ◽  
Vol 29 (2) ◽  
pp. 159-173 ◽  
Author(s):  
Duane M. Brandon
Keyword(s):  
Internal Audit ◽  
Audit Fees ◽  
Accounting Firms ◽  
Internal Auditor ◽  
Internal Auditors ◽  
External Auditors ◽  
Consulting Services ◽  
Significant Area ◽  
External Auditor ◽  
Nonaudit Services

SUMMARY: In the last decade internal auditing services has been a significant area of growth for public accounting firms. Unlike the provision of external audits, the provision of outsourced internal audit services does not prohibit accounting firms from providing the client with additional services. This study investigates some implications of an outsourced internal auditor providing nonaudit services. Specifically, 89 experienced external auditors completed an experiment to investigate whether external auditors will evaluate and rely on an outsourced internal auditor’s work differently when the internal auditor also provides nonaudit services. Results indicate that evaluations of the outsourced internal auditors’ objectivity were negatively affected by the provision of nonaudit services. Further, the differences in objectivity perceptions are tempered by the use of different personnel to provide consulting services. Competence perceptions were not affected. Results also indicate that external auditor reliance on internal audit and suggested audit fees are affected. However, these results do not appear to be tempered by audit and nonaudit staffing decisions.

Internal audit quality: perceptions of Tunisian internal auditors an explanatory research

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aida Krichene ◽  
Emna Baklouti
Keyword(s):  
Audit Quality ◽  
Internal Audit ◽  
Access To Information ◽  
Quality Model ◽  
Internal Auditor ◽  
Content Type ◽  
Internal Auditors ◽  
External Auditor ◽  
The Relationship

Purpose The purpose of this study is to understand how internal auditors perceive the internal audit quality and to highlight the different profiles of internal auditors based on their perception of internal audit quality determinants. Design/methodology/approach The authors’ methodological approach is based on the submission of a self-administered questionnaire. The final sample consists of 104 internal auditors. The first stage of the study is in the lead of a certified public accountants (CPA), which highlights seven factors of the internal audit quality. The second step is a confirmatory factor analysis (CFA) that allowed the authors to validate the model proposed by the CPA. Finally, the authors carry out a typological analysis of the auditors according to their way of perceiving the factors extracted by the CPA. Findings The authors’ model, validated by the CFA, shows that the knowledge of the internal auditor, the independence of reporting, compliance with professional standards of internal audit, the relationship with the external auditor, the personal relationship of the internal auditor, the access to information and the field of intervention of the internal auditor have a positive association with the internal audit quality but with a different degree of significance. For example, the field of intervention of the internal auditor and the access to information explain better the internal audit quality. However, the knowledge of the internal auditor and the relationship with the external auditor are not significant to explain the internal audit quality. From the hierarchical cluster analysis, four groups of internal auditors emerged: the autonomous, the perfectionists, the rigorous ones and the objectives. Originality/value In offering these findings, the paper contributes to the existing internal audit literature by introducing evidence from an emerging country, namely, Tunisia, of the internal audit quality model. In addition, the authors proposed a new measure to the internal audit quality model which is the use of the work of the internal auditor by the external auditor. This study is also interesting to managers and professional internal audit organizations in recognizing the characteristics of the quality of the internal audit and advance reflections on the effectiveness of internal audit practices. The authors’ study proposes a typology of certified internal auditors through their perceptions of the quality of the internal audit while taking into account the specificities of the Tunisian audit market. This provides insights to managers and audit committees on the measures necessary to ensure the relevance of the internal audit work within their companies.

Internal auditor communications: an experimental investigation of managerial perceptions

2019 ◽  
Vol 34 (4) ◽  
pp. 462-485 ◽  
Author(s):  
Maia Farkas ◽  
Rina Hirsch ◽  
Julia Kokina
Keyword(s):  
Internal Audit ◽  
Audit Report ◽  
Communication Mode ◽  
Internal Auditor ◽  
Content Type ◽  
Internal Auditors ◽  
Root Cause ◽  
Report Quality ◽  
Managerial Perceptions

Purpose The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement. Design/methodology/approach The experiment involved a 2 × 2 × 2 design with internal auditor gender, mode of communication and root cause variables randomly assigned to 228 experienced managers. Findings When the internal auditor includes a root cause for an identified deficiency in an internal audit report, management perceptions of the quality of that report improve. The gender of the internal auditor who communicates the audit finding with management does not significantly impact management’s perceptions. Additionally, communicating the internal audit report via e-mail instead of videoconference results in improved managerial perceptions of the quality of the internal auditor. While improvements in perceptions of internal auditor quality lead to greater agreement with internal auditor recommendations, improvements in perceptions of report quality lead to greater implementation of internal-auditor-recommended remediation strategies. Research limitations/implications The operationalization of the manipulated variables of interest (communication mode, gender and root cause) may limit the generalizability of the study’s results. Practical implications The paper includes managerial implications for internal auditors’ choice of communication mode and inclusion of a root cause in interim internal audit reports. Originality/value This study provides evidence on the factors that could improve management’s perceptions of internal auditors’ work. The findings can help organizations, such as the Institute of Internal Auditors, to better understand how to address the needs of those who communicate with internal auditors.

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