The importance of internal auditing has increased with the expansion of the activities carried out by the establishments, and their continuous efforts to evaluate these activities, develop them and increase their productivity, and also in view of the services provided by the internal audit function of the administration represented in:
- Preventive services: ensuring adequate asset protection, protection of policies and plans from deviation in application;
- Evaluative services: measuring and evaluating the effectiveness of internal control systems, and adherence to management policies;
- Development services: Provide suggestions for the development and improvement of systems within the establishment.
Internal audit objectives:
1. Purpose of protection:
Where the work of checking and matching between the actual performance and pre-set standards of:
- Company policies
- Accounting procedures
- Internal control systems
- Records of the establishment
- Value of establishment
- Operating activities.
Internal audit helps to detect and identify deviations and take them into consideration during the performance of activities and in subsequent stages.
This objective also includes maintaining the integrity of the following matters and ensuring their application: the company’s assets of all types, the financial and accounting systems and procedures, the policies and plans adopted in the company, the records and documents and the regular and electronic files approved in the project.
2. Objective of building and development:
Means suggesting appropriate steps to correct the results of examination and conformity (deviations) and advise management. The Internal Auditor, in addition to reviewing the accounting and financial audit, shall:
- Achieving adherence to established policies, procedures and plans
- Verifying the integrity of asset protection procedures
- Proposal to improve and improve performance.
The primary purpose of the internal audit is to assist the members of the administration in carrying out their duties and responsibilities by the internal auditor conducting the examination and evaluation, and giving management advice and comments on the processes being reviewed.
Based on the above, the internal audit profession is currently receiving significant global attention and support from boards of directors. Studies and statistics have shown that international institutions lose about 6% of their average annual income due to fraud and misuse, and also proved that many losses were possible Avoid them if there were effective audit departments that could highlight weaknesses in internal control systems and fail to manage risks effectively and efficiently.
Despite the inevitability of its independence from the executive management of any institution; however, the internal audit department is an important and complementary part of the organizational structure, but it is one of the most important departments in the institutions, although it is not a profit producing departments.
As the board of directors, it is the only independent entity in the institution that can provide reasonable assurance to the Board that the institution is moving in the right direction to achieve the objectives and strategies set by the Board of Directors.
With frequent economic crises, corruption, misappropriation and misuse of assets, boards’ and audit committees have focused on activating and strengthening the internal audit profession, in order to mitigate many of the risks associated with managing the business of the institution.
The perception of the Audit Department as a financially costly management of the institution has changed to the fact that it is an important, effective and necessary management in order to protect the institution from high risks, as many inside and outside the institution attempt to manipulate and fraud.