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A31109011

IN1LkNAL CLkA1ICNAL AND GCVLkNMLN1AL
AUDI1ING


lnLernal flnanclal audlLlng
lnLernal audlLlng ls an lndependenL ob[ecLlve assurance and consulLlng acLlvlLy deslgned Lo
Add value and lmprove Lhe efflclency of an organlzaLlon operaLlons(LhaL company can
achleve lLs ob[ecLlve)
8evlewlng Lhe rellablllLy and lnLegrlLy of lnformaLlon
nsurlng compllance wlLh pollcles and regulaLlon/
Safeguardlng asseLs

*Lernal audlLor(CA) provlded by AlCA(regulaLe professlons seL sLandards "CAAS")
*lnLernal audlLor provlded by Lhe lnsLlLuLe of lnLernal audlLor(llA)

llA ls an organlzaLlon slmllar Lo Lhe AlCA
sLabllsh eLhlcal and pracLlce sLandards(code of eLhlcs)
rovldes educaLlon
ncourages professlonallsm
llA lnLernaLlonal sLandards for Lhe professlonal pracLlce of lnLernal audlLlng(red book)

8elaLlonshlp of lnLernal and eLernal audlLors
SlmllarlLles
O oLh musL be compeLenL as audlLors and remaln ob[ecLlve ln performlng Lhelr work and
reporLlng Lhelr resulL
O erformlng 1CC S1C1
O oLh use Lhe audlL rlsk model and maLerlallLy ln decldlng Lhe eLenL of Lhelr LesLs and
evaluaLlng resulLs(Lhere ls lnverse relaLlonshlp beLween u8 and no of evldence)
O 8educe conLrol rlsk lf lnLernal audlLors are effecLlve(efflclency)
O lf efflclenL audlL Lhe fee wlll be less

ulfferences
O Lernal audlLor ls responslble Lo flnanclal sLaLemenLs users
O lnLernal audlLor ls responslble Lo MC1
O lnLernal audlL reporLs are noL sLandardlzed(do noL have a seL of rules Lo follow use any
rule LhaL ls beLLer Lo MC1 so lL ls dlffer from one company Lo anoLher
O buL Lernal audlL reporLs are sLandardlzed(one seL of flnanclal sLaLemenL should follow
CAA)
O ueclslon regardlng maLerlallLy dlffer
O Lernal audlLor ls normally ouLslder lnLernal employed by company
O Lernal concern wlLh flnanclal lssue(maLerlallLy)
O lnLernal concern wlLh flnanclal and nonflnanclal lssue(wlder)

CovernmenLal flnanclal audlLlng
AudlL governmenLal unlLs(eecuLlve unlL) and documenLs
uSA CAC reporL Lo congress
ahraln chamber of flnanclal conLrol

CovernmenL audlLlng sLandards(yellow book) 1he prlmary source of auLhorlLaLlve llLeraLure for
performance of governmenL audlL
?ellow book sLandards are ofLen called generally accepLed governmenL audlLlng sLandards(CACAS)
?ellow book sLandards were slmllar Lo Lhe CAAS sLandards(10) buL addlLlonal guldance
1MaLerlallLy and slgnlflcance
2CuallLy conLrol
3Compllance audlLlng
48eporLlng
3AudlL flles

AudlL and reporLlng requlremenLs(requlred by governmenL from audlLor)
1he audlL should be accordlng Lo CACAS(wheLher Lhe flnanclal sLaLemenLs are falrly sLaLed)
1he audlLor musL obLaln an undersLandlng of lnLernal conLrol
1he audlLor should deLermlne wheLher Lhe cllenL has complled wlLh laws regulaLlons

CperaLlonal audlLlng
CperaLlonal audlLlng revlewlng any parL of enLlLy ln order Lo evaluaLe Lhe efflclency and
effecLlveness of operaLlng procedure
O Lake one parL of unlverslLy of ahraln(reglsLraLlon deparLmenL)

Servlce Lo MC1 Lhe audlLor suggesL Lhe ways and means Lo lmprove Lhe performance
ConducL by normally by lnLernal audlLor(lnLernal conLrol well undersLand by lnLernal audlLor)
lf lL ls governmenL unlL by governmenLal audlLor
lf do noL have lnLernal audlLor by CA
Some people use Lerm MC1 audlLlng or performance audlLlng lnsLead of operaLlonal audlLlng


D|fference between operat|ona| and f|nanc|a| aud|t|ng

urpose of the aud|t
O CperaLlonal audlLlng emphaslzes effecLlveness and efflclency of operaLlon Concerns
operaLlng performance for Lhe fuLure
O lnanclal audlLlng reporL Lo varlous users on wheLher flnanclal sLaLemenLs are falrly
sLaLed(epress an oplnlon ln flnanclal sLaLemenLs) CrlenLed Lo Lhe pasL

D|str|but|on of the reports
O CperaLlonal audlLlng reporLs for managemenL(no adequaLe rules)
O lnanclal audlLlng reporL Lo many users of flnanclal sLaLemenLs(use CAA)

Inc|us|on of nonf|nanc|a| areas
O CperaLlonal audlLlng cover flnanclal and nonflnanclal
O lnanclal audlLlng cover only flnanclal

;ULS1ICN

1 WhaL ls Lhe slgnlflcanL dlfference beLween audlLlng prlvaLe company and governmenL?
2 Why Lhe governmenL musL have lLs own accounLlng sLandard?
3 Can an audlLor audlL boLh governmenL and prlvaLe company?