INTERNAL AUDIT

KULIAH 1
DEFINITION
Internal auditing is an independent, objective
assurance and consulting activity designed to
add value and improve an organization's
operations. It helps an organization
accomplish its objectives by bringing a
systematic, disciplined approach to evaluate
and improve the effectiveness of risk
management, control, and governance
processes.
THE ROLE OF INTERNAL AUDITING
The role of internal audit is to provide
independent assurance that an organisations
risk management, governance and internal
control processes are operating efectively
WHAT IS INTERNAL AUDITING

Internal auditing can also be recognized as an
organizational control that functions by
measuring and evaluating the effectiveness of
other controls.
HISTORY OF
INTERNAL AUDITING
1. An early internal auditor often was viewed
as a financially oriented checker of records
and more of a police officer than a
coworker.
HISTORY OF
INTERNAL AUDITING
2. During the 1960s, there was a strong tendency for
many to use the term of operational auditing in place
of the traditional internal auditing.
The rationale was that internal auditing was a term
tied too closely with basic financial auditing,
including the external auditors review of both
financial control activities and financial statements.
Internal auditors called themselves operational
auditors because of their desire to focus more of
their efforts on the other operational activities in the
organization that could potentially point to areas for
increased profit and overall management service

HISTORY OF
INTERNAL AUDITING
3. Internal auditing today involves a broad
spectrum of types of operational and
financial activity and levels of coverage. In
organizations today, internal auditing has
moved beyond being a staff activity roughly
tied to the controllers organization,
although internal audits role is constantly
being redefined.
SARBANES-OXLEY (SOA)
Public AccountingReform and Investor
Protection Act (Aug 2002)
Established regulatory rules for public
accounting firms, auditing standards, and
corporate governance

SARBANES-OXLEY (SOA)
SEC has taken over the process for
establishing auditing standards from the
AICPA through the Public Company
Accounting Oversight Board (PCAOB).
SARBANES-OXLEY (SOA)
The major sections of SOA of interest to internal
auditors.
1. Establishmentof PCAOB (Public Company
Acounting Oversight Board) -- IAI
2. Accounting Firm Inspections (PCAOB) Peer
Review
3. Auditing Standards (PCAOB) - IAPI
4. Out of Scope Practices - PB VIII. A.2.
5. Audit Partner Rotations (5 years) Peraturan
Bapepam VIII. A.2
SARBANES-OXLEY (SOA)
6. Audit Committee Independence PB IX.I.5
7. Corp. Responsibility for Financial Reports PB
VIII.G.11
8. Officer and Director Bars UU PT
9. Internal Control Reports X.K.6
10. Financial Expert PB IX.I.5
11.Real Time Disclosure - X.K.6
12. Officer or Director Prohibitions UU PT

PERATURAN TERKAIT IA
1. Peraturan Bapepam X.K.6 :
Dalam laporan tahunan harus disampaikan uraian
mengenai sistem pengendalian interen (internal
control) yang diterapkan oleh perusahaan, paling
kurang mengenai:
a) pengendalian keuangan dan operasional, serta
kepatuhan terhadap peraturan perundang-
undangan lainnya; dan
b) reviu atas efektivitas sistem pengendalian interen

PERATURAN TERKAIT IA
2. Peraturan Bapepam IX.I.7 : Audit Internal