Internal Audit Regulations
The Internal Audit Regulations (IAR) outlines the roles, responsibilities and procedures for Internal Audit. It sets out the objectives of Internal Audit and the responsibilities of Internal Auditors for carrying out their duties in an independent, objective and informed manner in order to ensure compliance with the applicable policies and regulations.
Objectives of Internal Audit
The objectives of Internal Audit are to provide assurance to management and the Board of Directors (the “Board”) that management frameworks, procedures and controls are functioning effectively and in compliance with applicable policies, laws and regulations. Internal Audit will also provide objective advice to improve the efficiency and effectiveness of the organization’s operations.
Internal Auditors
Internal Auditors must be independent, objective and knowledgeable. Independence is critical to the credibility of the Audit process and to the protection of organizational resources. Internal Auditors must not participate in the day-to-day activities of the organization, but must have full access to the organization’s records, practices and procedures.
Internal Auditors have an obligation to maintain a high level of confidentiality regarding the information they have access to, and to be experts in their field. They should have knowledge in the areas of internal control systems, corporate governance structure and information systems.
Roles and Responsibilities
The roles and responsibilities of Internal Auditors are outlined in the Internal Audit Regulations. Generally, the responsibilities of Internal Auditors include:
· To plan and perform audits to assess the adequacy and effectiveness of the organization’s internal control systems and procedures, compliance with applicable policies and regulations and the overall effectiveness of the organization.
· To identify areas of non-compliance and potential improvement, and to collaborate with management to develop solutions and corrective action plans.
· To prepare and present reports to management, the Board, and other parties as required, of the results of the audit and the evaluation of the organization’s internal control system.
· To contribute to the development and implementation of internal control systems, procedures and policies, and to monitor their effectiveness.
· To provide objective assessments of the organization’s operations and financial performance.
· To provide advice and counsel to management on financial and operational matters.
· To communicate and collaborate with management and the Board regarding the scope and purpose of audits.
· To maintain a high degree of confidentiality with regard to the information obtained in the audit process.
· To develop and maintain working relationships with regulatory, legal, and accounting personnel in other organizations to obtain information and understand developments in the field of internal auditing.
Audit Program
Internal Auditors must implement an audit program that is appropriate for the organization and its operations. The audit program should be designed to assess the reliability and the effectiveness of the organization’s internal control systems, procedures and policies. The program should be structured and aligned with the objectives of the organization, and should address all applicable laws and regulations.
The audits should be planned to cover all key areas of the organization and should be conducted in a systematic and continual manner. Internal auditors must also consider areas of potential vulnerability and risk to the organization and identify areas that may warrant audit attention. Internal Auditors must also consider the cost and benefit of all audit activities and the resources available to complete the audit.
Reporting
Internal Auditors must document the findings of their audit reports in such a manner to enable clear communication among all parties involved. Reports should be focused and contain clear recommendations for improvements of the organization’s internal control systems and procedures. Internal Audit Reports should also include an opinion on the extent to which internal control systems are functioning as designed and any areas of weakness as well as recommendations for any corrective actions that may be necessary.
Conclusion
The Internal Audit Regulations outlines the roles, responsibilities and procedures for Internal Audit, and provides a framework for Internal Auditors to fulfill their roles in an independent, objective, and informed manner. The IAR also sets out the objectives of Internal Audit and describes the responsibilities of Internal Auditors and the audit process. Internal Auditors must ensure they maintain proper internal controls and procedures in accordance with applicable laws and regulations, and to ensure the accuracy and reliability of the organization’s financial records.
