internal audit

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Internal Audit

The process of reviewing business activities in-house to identify inefficiencies, reduce costs, and otherwise achieve organizational objectives. Internal audits may investigate potential theft or fraud and ensure compliance with applicable regulations and policies. They also assist in risk management. In a large company, especially a publicly traded one, internal auditing is conducted by a board independent from any management and answerable only to an audit committee, a subcommittee on the board of directors. The growth of internal audits accelerated following the 2002 passage of the Sarbanes-Oxley Act, which increased the accounting regulations for public companies.

internal audit

The examination of a company's records and reports by its employees. Internal audits are usually intended to prevent fraud and to ensure compliance with board directives and management policies. In contrast, the financial statements presented to stockholders are typically prepared by outside parties to ensure absolute objectivity. Compare external audit.

internal audit

see AUDIT.
References in periodicals archive ?
A cost-conscious, proactive internal audit group with custom-designed co-sourcing programs retains the advantages of outsourcing along with the benefits of having an in-house internal audit staff, such as knowledge of management methods, accessibility, responsiveness, loyalty and a shared vision for the organization's strategic business goals.
Procedure 3 in the report illustrates the reliance A&A placed upon the work of the internal audit staff. Procedures 4, 5, 6, and 7 in the report list their additional tests.
When respondents were asked to explain the change in their audit fees last year, the two most popular responses were to cite either increased work by their internal audit staff or their finance staff, suggesting that fees might have increased more without the additional work that was done in-house.
See what executives, audit committee chairs and board members said about the internal audit function, where they think internal auditing should put its risk focus and what barriers might prevent internal audit staff from taking a more strategic role.
This may explain why the survey found that half of companies are adding more internal audit staff, and that an increasing number of corporate internal auditors hold graduate degrees, including Ph.D.s.
Mutual cooperation 5.38 6.50 Yes Positive financial 5.67 6.60 Yes statement negotiations Positive internal control 5.44 6.15 Yes negotiations Quality of informal 5.35 6.53 Yes consultation Satisfaction with level of 4.85 6.29 Yes service CURRENT INTERNAL SWITCHERS CONTROL COSTS (2) Total internal control costs as a 0.92% percentage of revenue Accounting staff 5.31 Internal audit staff 3.31 External consultants 4.64 New information systems 4.29 Reconfiguration of existing 4.29 systems Documentation of internal controls 4.52 Testing of internal controls 4.48 Maintaining internal controls 4.79 NONSWITCHERS RESPONSE (1) CURRENT AUDITOR CURRENTLY DIFFERENT FROM SWITCHERS?
The contract with RSM Tenon is for graduate intake and existing internal audit staff training.
Internal stakeholders most directly affected by internal control developments will be senior managers, board members (particularly the audit committee), financial personnel, internal audit staff and project team members.
Abdolmohammadi associates positively the length of training with compliance, while other significant variables are internal audit certification, 'Standards are too costly,' 'Not perceived as value added by management/board' and 'Inadequate internal audit staff' that are negatively associated with compliance.
It defines the focus as well as the effort of the internal audit staff. Getting it right through a comprehensive risk assessment will drive better results, achieve greater efficiencies and cover the important things that either add or preserve value in the organization.
New guidelines have been issued, reducing some of the costs and greatly decreasing the tax on a company's finance and internal audit staff. Financial statement restatements are decreasing while the quality of relevant financial data is increasing, allowing company executives to make quicker, more nimble decisions.
What they are finding is that the often narrow, mechanical nature of Sarbanes-Oxley testing has created a skills gap--particularly with newer internal audit staff members whose professional experience has consisted largely of Sarbanes-Oxley-related work.

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