Internal control and internal audit processes

Internal controls

financial controls, operational controls and compliance controls

These controls…

reduce the risk of fraud, errors, waste, and improve the overall governance of an organisation

Process of internal audits

Gathering audit evidence - Compliance and Substantive tests

types of audit procedures

InquiryInspection:Reconciliation:Confirmation

audit sampling

• Statistical sampling

• Non-statistical sampling 

Statistical sampling techniques

• Random number sampling

• Systematic or interval sampling

• Stratified sampling

• Cluster sampling

The purpose of an internal audit report

• It confirms that the areas where risks are managed and controlled are adequate.

• Highlights areas where risk management and control are inadequate.

• Provide recommendations for improvement in the areas where risk management and control are inadequate.

The content of an internal audit report

• The reason, goals, and scope of the audit.

• The method, techniques and steps taken during the audit process.

• Audit results, findings, and conclusions.

What are the reasons for interim reports?

• The auditor can inform management about issues that need to be addressed immediately (findings such as fraud).

• To keep management informed about the progress of the audit.