Organizational internal audit activity should be Independence and Objectivity Summary: Organizational internal audit activity should be independent

from the activities it audits. "Internal auditors should be independent of the activities they audit. Such independence permits internal auditors to perform their work freely and objectively it should also be free from interference in determining the scope of its work, in performing its duties and in communicating the results. To maintain its independence, Administrative matters relate to the organizations management structure; and the reporting line for them should facilitate the activitys day-to-day operations. The internal auditor occupies a unique position is employed by the management to ensure objectivity and independence;

The internal audit activity should have a mandate through a written audit charter that establishes its purpose, authority, and responsibility to support its independence and objectivity within an organization Independence is as greatest perceive for the internal auditor when the consulting activity involved accounting system implementation or design, or business/accounting related issues such as business planning, mergers, cash management, budgeting and inventories. The independence is perceive to be least when the consulting activity involved non-accounting systems consulting, total quality management, pension cost review, evaluating external audit work, contract compliance, and reviewing performance of outside vendor services. Also Objectivity can be presumed to be impaired when internal auditors perform an assurance review of any activity for which they had any authority or responsibility within the past year or a period significant enough to influence their judgment or opinion. Internal auditors should not accept gifts or favors from others such as employees, clients or business associates. It should also be free from interference in determining the scope of its work, in performing its duties and in communicating the results. To maintain its independence, it should have solid-line reporting relationship to the audit committee with a dotted-line reporting relationship to a senior executive in the organization for administrative purposes Objectivity is a mental attitude which internal auditors should maintain while performing engagements. The internal auditor should have an impartial, un-biased attitude and avoid conflict of interest situations, as that would prejudice his/her ability to perform the duties objectively. The results of internal audit work should be reviewed before they are released in order to provide a reasonable assurance that the work has been performed objectively. The internal auditors should adopt a policy that endorses their commitment to abiding by the Code of Ethics, avoiding conflicts of interest, disclosing any activity that could result in a possible conflict of interests

According to my article that the report speculates that it may also represent a "false sense of security. That is, although believe they are independent, the importance of independence and objectivity to the internal audit function, Conclusion: Independence those are associated with undertaking each consulting project that an auditor can successfully protect the independence and objectivity that is a cornerstone of auditor profession

Published By: Articlesbase.com