Frequently Asked Questions
Below are answers to some of the frequently asked questions as related to Internal Audit:
What is Internal Audit?
Internal Audit is defined as an independent, objective, assurance and consulting activity designed to add value and improve an organizationís 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.
What is the difference between an internal auditor and external auditor?
Each type of auditor has a different scope, perspective and objectives. Internal Audit is concerned with anything within the University and is designed to add value and improve the University's operations. External Auditors are independent of the University and are hired to provide an opinion on the information being audited, including annual financial statements.
What is internal control?
Internal control is a process designed to provide reasonable assurance regarding the achievement of goals and objectives in:
- effectiveness and efficiency of operations
- reliability of financial reporting, and,
- compliance with laws and regulations.
Simply put, internal controls are the tools used every day by managers to help the organization achieve its objectives and include everything from written procedures to good business practices.
Are auditors only interested in increasing controls?
No, all controls cost money and the cost of achieving control must be balanced against the impact if things go wrong and the likelihood of that happening. Internal Auditor will identify and report unnecessary or uneconomic controls as part of its review and may suggest alternatives if appropriate.
What management responsibilities does Internal Auditor have?
None. Internal Auditor is independent of management to provide independence from activities that it audits. Internal Auditor reports directly by its function to the Audit & Compliance Committee of the Board of Governors and only administratively to the VP: Finance & Administration.
Why is it important for Internal Auditor to be independent?
This ensures that Internal Auditor is totally impartial in the work that it carries out. It has no vested interests.
Is it Internal Auditor's job to identify fraud?
No. Internal Auditor attempts to minimize the risk of fraud by identifying potential weaknesses in control, which might enable fraud to be perpetuated. This work sometimes results in fraud being detected and reported in which case a full investigation will be carried out.
Does Internal Auditor assess the ability of managers?
No. Internal Auditor reviews processes, not people.
Can a unit or department decline to be audited?
Once the annual Audit Plan is approved by the Audit & Compliance Committee of the Board of Governors, it becomes the work plan for the Internal Audit department. Only under unusual circumstances would a scheduled audit be delayed. Although an audit may identify risks within the unit or department, the purpose of the audit is to improve the operations through the discovery of efficiencies and more effective ways to perform functions.
Can a department or unit request an operational audit without identifying a specific problem?
Requests for an operational audit can be made by contacting the Internal Auditor. Depending on the scope and the risk assessment of the audit, time may be made available in the Audit Plan for the current year or may be included in the future Internal Audit plans.