Roles of internal Auditor

1. Reviewing accounting and internal control systems

The Internal Auditor checks the financial controls in the company or an organization, possibly
assisting work with the external auditor. The internal auditor will make sure that appropriate
controls had been plan or not. They also monitor monitor whether Internal control is operating
with effective or not and also to suggest any new idea to achieve the improvements.

2. Assisting with the identification of significant risk

The internal auditor will assist the managements to identify the risks facing the organization
and understand how they will impact the delivery of objectives if they are not managed
effectively. Some organizations will have a higher appetite for risk arising from changing
trends and business or economic conditions. The techniques of internal auditing have
therefore changed from a reactive and control-based form to a more proactive and risk-based
approach. This enables the internal auditor to anticipate possible future concerns and
opportunities providing assurance, advice and insight where it is most needed.

3. Evaluating controls and advising managers at all levels

The Internal audit’s role in evaluating the management of risk is wide ranging because
everyone from the mailroom to the boardroom is involved in internal control. The internal
auditor’s work includes assessing the tone and risk management culture of the organization at
one level through to evaluating and reporting on the effectiveness of the implementation of
management policies at another.

4. Examining the financial and operating information

The internal auditors make sure that reporting of financial information is made on a timely
basis and also checks the information in the reports is true and accurate. For example, the
internal auditor will be checking the monthly account that prepared by accounts department to
ensure it correct monthly report. They also will do an analysis to improve or cut cost some
unnecessary company expenses.

5. Reviewing the economy efficiency and effectiveness of operation

The internal auditor mainly helps a company production or management to reduce some
exaggerated cost in production. The internal auditor checks whether a particular activity or
production is cost effective, uses the minimum input for a given output to meets its stated
objectives. For example, the Examination of purchase, Production, HR dept, and also to check
that whether these departments are efficient, effective, and economical.

6. Assisting a management in special investigation

The internal auditor involves them self in investigations other areas of the company’s
business. For example, the internal auditor will be checking the cost estimates or do a
complete budget before a company buy or build new factory.
Importance or Advantages of internal Auditor

I. Provide More Effective Management

It helps a company’s management to manage it more effectively. An internal auditor can

identify the shortcomings in the internal controls and operations of the company, if any. It
gives the management some useful insights that are important for achieving the company’s
goals.

II. Improvement the Staff Performance

Due to frequent checks by internal auditor, the staff will always work with correctly due to
the fear that the internal auditor may catch their mistakes almost immediately. It ensures an
improvement in their efficiency and performance, which becomes a good habit over some
time. Moreover, for honest employees who are already on track, it acts as a morale booster.

III. Resource Optimization

It helps the management zero in on the areas where the resources are not being utilized to
their full potential. It goes a long way in controlling the costs and expenses of the company.
Therefore, it is also helpful towards improving the economic position of a company.

IV. Division of Work

Taking resource optimization further, the practice of internal audit keeps a check on and
observes the activities of all the departments and all of their employees. It does this by
promoting the optimum division of labor across the department or company.

Disadvantage Of Internal Auditor

a. Availability of Qualified Staff

The conducts any type of audit properly whether it internal or external, one needs to have
years of experience. So, it is often a tough task finding sufficiently qualified personnel in the
company who can conduct an internal audit. And you can’t simply hire an inexperienced
auditor since that will do more damage to your company than good.

b. Dependence on Accounting Process

As it does in the dictionary, accounting always precedes auditing. The beginning of an

internal audit depends upon the completion of accounting. If there is a delay in the
accounting process results in a delay in the audit process as well. The internal auditor cannot
check or review the monthly financial accounts on time.
Ethics, Rules and Framework

1.Ethics and rules that internal auditor need to follow when conduct the audit work

 Integrity

The integrity of internal auditors establishes trust and it provides the basis for reliance on their
judgment. The internal auditor should perform their work with honesty, diligence and
responsibility. They also must observe the law and make disclosures expected by the law
band the profession. The internal auditor shall not knowingly involve any illegal activity and
not engage in acts that are discreditable to the profession of internal auditing or the company.

 Objectivity

The internal auditors exhibit the highest level of professional objectivity in gathering,
evaluating and communicating information about the activity and also the process that being
examined. Internal auditors make a balanced assessment of all the relevant circumstances and
not unduly influenced by their own interests or by other forming judgements. For example,
the internal auditor should not accept anything that may impair or be presumed to impair their
professional judgment. The internal auditor also must disclose all materials facts known to
them and if not disclosed will distort the reporting activities under review.

 Confidently

The internal auditors should respect the value and ownership of information they receive and
do not disclose information without appropriate authority unless there is a legal or
professional obligation to do so. For example, the internal auditor should not use information
for any personal gain or in any manner that would be against to the law and objectives of
objectives of an organization.

 Competency

The internal auditor needs to apply the knowledge, skills and experience needed when
conduct the audit work. The internal auditors should perform internal auditing works to a
company in accordance with the standards and framework. They must always need to
improve their proficiency and the effectiveness of their audit work in a organizations.

2.Framework

The Internal Audit Framework details the purpose, objectives and deliverables of Internal Audit and
explains the methodology and standards used to achieve independent assurance outcomes. For
example, Internal Audit activities will be conducted in accordance with the Institute of Internal
Auditors and International Professional Practices Framework (IPPF). Although the internal auditor is
company staff, the internal auditor must follow the standards of independence. When the internal
audit flows the framework, it will generate an effective result and the management can take any
accurate future decision on the company activities.