INTRODUCTION TO INTERNAL AUDITING
History of the Internal Audit function
This section should be customized by each audit office to provide relevant background as to how the office came into being and any key facts that the new auditor should know.
Overview
An audit is fundamentally a comparison of audit evidence to audit criteria to determine findings. The evidence is the objective information collected through interviews, visual observation, and documentation review. The audit criteria are the expectations or “rules” of how conditions should be. It is the criteria that distinguish one audit from the next. For example, in compliance auditing, the criteria are the laws, regulations or policies.
When evidence is compared to criteria, one can determine whether the audited entity does or does not conform. This determination is a finding, and a finding can either be one of conformance, or non-conformance. Therefore, an audit will always produce findings, even if what is being audited is in full conformance with criteria.
Other key definitions to be aware of with auditing are: objectives, scope, auditee, client, and auditor. The audit objective(s) is simply why you are conducting an audit; usually the reason is to demonstrate conformance to stated criteria. The audit scope is what entity is being audited, and can be a company, a site, or unit within a site or company.
The auditor is the one collecting evidence and determining findings. The auditor can be comprised of several individuals on a team. There are requirements that state those performing auditing functions be qualified in their tasks. This means the auditors must have received appropriate training. However, there may be audit team members who do not have the training, but are on the team because of some unique expertise, such as Information systems, medial degrees, etc.
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