Financial Internal Auditing Procedure | AC1050

Financial Internal Auditing Procedure

The Financial Internal Auditing Procedure describes the Internal Audit process in order to ensure compliance with applicable standards and regulations pertaining to internal control and financial reporting. Audit frequency and extent are determined by the complexity of the process and the risk of deficiency, among other factors. The Procedure applies to all financial/accounting operations. (24 pages, 4292 words)

Financial Internal Auditing Responsibilities:

The Audit Team Leader is responsible for managing the Internal Audit process, developing and managing the Internal Audit schedule (or cycle), supervising Audit Team members, and reporting the Audit Team Leader’s findings to the Audit Team.

Internal auditors are responsible for conducting complete, detailed, and objective Internal Audits and reporting their findings to the Audit Team Leader.

The Audit Team Leader is responsible for reviewing and approving the Internal Audit Department’s annual and long-range audit plans and activities, for reviewing significant findings and recommendations by Internal Audit, and for ensuring the adequacy of management’s corrective actions.

The CFO (Chief Financial Officer) is responsible for ensuring that corrective actions are taken in a timely manner.

All Employees are responsible for cooperating with Internal Auditors in the course of the audit process and for taking appropriate actions, where required, to correct deficiencies found during the audit.

Financial Internal Auditing Definitions:

Audit evidence – All information used by an auditor in arriving at conclusions on which the audit opinion is based. Audit evidence, which is cumulative in nature, includes audit evidence obtained from audit procedures performed during the course of the audit, information contained in accounting records underlying the financial statements, and possibly evidence obtained from other sources (e.g., previous audits, procedures).

Audit opinion – The part of the auditor’s report in which the auditor expresses an opinion on the extent to which financial statements are materially misstated. The fact that it is an opinion and not a certification means the auditor is providing reasonable – not complete – assurance as to whether the financial statements are materially misstated.

Audit plan – Description or outline of the purpose, scope, objectives and activities of an audit.

Audit schedule – Annual plan of audits to be accomplished, areas to be audited, and participating auditors; also “audit cycle.”

Audit scope – Refers to activities covered by an internal audit; includes such factors as the nature and extent of the audit subject (processes, controls, statements, etc.) and the time frame being audited.

Financial Internal Auditing Procedure Activities

• Financial Internal Audit Background
• Internal Audit Planning
• Conducting the Financial Internal Audit
• Financial Internal Audit Reporting
• Financial Internal Audit Follow-up

Financial Internal Auditing Procedure References

• International Standards for the Professional Practice of Internal Auditing, Institue of Internal Auditors (IIA), Jan., 2007
• IIA Code of Ethics, Institute of Internal Auditors, 2000
• Internal Audit Charter (version 1.0), Bank for International Settlements (BIS), March 20, 2003
• Public Company Accounting Reform and Investor Protection Act of 2002(USA)

Financial Internal Auditing Procedure Forms

• Financial Audit Schedule Template
• Financial Audit Plan Template
• Financial Audit Checklist Template
• Financial Audit Opinion Template
• Financial Final Audit Report Template