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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Performance Measurement and Controlling of Internal Audit – More Than Just a Measurement Problem

  Dr. Andreas Langer, Andreas Herzig, Prof. Dr. Burkhard Pedell

  …generated with these are in an economically beneficial proportion to one another. So far, an exten- sive methodological debate regarding the controlling of… …internal audit is regarded as an internal service provider under marketing as- pects, the basic requirement of marketing to know its own customers and prod-… …product-market-matrix by Ansoff, the strategic options of market development and diversification are also conceivable for in- ternal audit (for an analogous illustration… …of the development of controlling cf. Horváth (2008)). However, these require a strong community of interests and an analytical basis, which… …conceptually advance the range of functions of internal audit. An expandable field of activities is addressed here in an exemplary man- ner: Internal audit… …reports directly to the implementing management in a two- tier system and not, for example, to the supervisory boards. Therefore, an effec- tive assessment… …department will not enforce a change to the company statutes (e.g. an internal audit department that reports to the supervisory board (Audit Committee) in… …management in internal audit is therefore addressed. 4 Quality Management and Quality Assessment in Internal Audit An intensive quality debate regarding… …(furthermore, the standards prescribe an annual self- assessment) and records the audit performance using a standardised questionnaire (or with a type of… …quality assessment can be regarded as a sufficient approach. However, if internal audit intends to be more than just an institutionalised “jail pro-…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  The Financial Sector: Risks, Controls and Assurance after the Financial Crisis

  Daniel Nelson

  …into the deepest global eco- nomic downturn since the 1930s? Providing a complete answer obviously is an extremely complex task, but we can roughly… …boom in good credit conditions, combined or feeding into an increased appetite for risks and for leveraging. All of this was accompanied by a rapid… …: trillions of dollars of debt, secured by an asset bubble just waiting to pop. Unfortunately this is a hindsight analysis. The market discipline failures… …countries; an increase to the funding resources of the IMF; and central banks’ monetary interventions, aimed at increasing liquidity and finding ways to get… …internal auditors learned and what can be done differently looking forward? An example can give us an opportunity to delineate some important themes in… …the money. On September 16, the Federal Reserve extended an USD 85 billion credit to AIG in exchange for about 80 % of the ownership of the company… …area in an entity. Nelson 96 It has also been reported that enterprise risk management (ERM) and the finance complex did not have adequate… …specific wording to indicate that the committee will review and approve internal audit’s an- nual work plan and its financial budget; this is a new… …mentioned, risk management will certainly be an area to focus internal audit’s attention on; admittedly, the current crisis involved both external risks and… …priorities of the or- ganization. Some might say that “back to basics” should also include an increased emphasis on testing and focus on fraud weaknesses that…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Continuous Auditing: Myth and Reality

  Adrian Garrido

  …real time a control task that should be performed by the line or could this be an Audit function? – Should it not rather be the Audit’s task to… …remains elusive, and expert practitioners remain rare”. This article do not intend to resolve these questions since there is not an easy an- swer and… …of projects, with perhaps an added diffi- culty for justifying a relevant investment in resources for something that does not have a particularly… …of Audit. Continuous Auditing: Myth and Reality 87 – Secondly, an excessive focus on operations could cause us to lose sight of the overall… …picture, where the most important risks generally lie. 2. The “Large” Continuous Auditing System. Developing an application with excessively global… …combines the best of them. 6 A Practical Proposal To conclude, I would like to propose an alternative approach and identify possible areas for future… …of the contrary, because, as we all know, no methodology or system can replace an auditor with the appropriate degree of expertise, capacity and… …, of course, fashionable term) based on the above information, in such a manner that, each time new data is stored, there is an assessment to know to… …from an overall view of the entity’s strategy) and bottom-up approaches (identifying, from the detailed processes, the risks which could have relevant… …impacts). Obviously, the identification of these types of aspects as risk areas to be considered within an Audit Plan is not something new. But, the…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  International Professional Practices Framework – Overview of the current guidance of the Institute of Internal Auditors

  T. Flemming Ruud, Philipp Friebe, Daniela Schmitz, Shqiponja Isufi

  …different legislative and regulatory initiatives aimed at improving the Governance, Risk Management and Internal Control of an organization. The PPF has… …important changes to the Standards are introduced and finally, the conclusion evaluates the changed framework and gives an outlook for the future… …Auditing was adopted without any changes; its importance and focus were confirmed. 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… …guidelines and are aimed either at ___________________ 8 Cf. The IIA (2009a), p. iii. Ruud, Friebe, Schmitz, Isufi 20 Assurance (identified by an… …specifies an un- conditional requirement. However, in five Standards (1010, 2050, 2130.A2, 2130.A3, 2220.A2) the word “should” is still used. In these… …Appetite The level of risk that an organization is willing to accept. Technology based Audit Techniques Any automated audit tool, such as generalized… …from assuming any man- agement responsibility by actually managing risks. The Internal Audit activity sup- ports the managers of an organization by…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Company Culture is Worth the Cost

  Sergey Martynov

  …processes In recent decades, some items that are not normally included on a company’s bal- ance sheet have assumed an ever-growing role in businesses… …shared by the majority of an organisa- tion’s employees. 1 The Importance of Company Culture Company culture is the main means of establishing employee… …asset of an organisation. For example, if we decided one day to change our employees and hire new staff from other entities, the company would continue… …control procedures, they will help to reduce the number of accidents caused by negligence. The impact of a good company culture is therefore an increase… …deliberately promoted and developed for specific purposes. In any case, company culture within an organisation goes through various stages of devel- opment (see… …beliefs, come from various different entities. In these situations it is extremely im- portant for the management to make an effort to rapidly develop a new… …need to sleep, personal safety etc. When the primary needs are satisfied, an individual aspires to satisfy the needs of the next level up, social needs… …Company culture can be considered to be an indicator of a business’s success. In fact, a number of studies show that organisations that have a strong… …, providing an objective and independent assessment of the degree of convergence between the company values and the employees’ beliefs. The internal audit… …, the level of employee loyalty, the level of motivation compared with the previous period. In conclusion, we must an- swer the question: has the company…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Internal Audit Standards: Everything for Everybody

  Inta Ozolina

  …Standards has been an object of discussion for some time now. One of the issues of these discussions is – whether all companies should apply the Standards…
• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Efficient Risk Management in Leasing Companies

  Prof. Dr. Fikret Hadžiæ, Amir Softiæ

  …to periodically pay the lessee in accordance with the contract. Leasing is a very important source of medium and long-term financing. It is an… …. It is especially conven- ient for small and medium-sized businesses that, quite often, do not have an access to commercial bank loans. Also, leasing… …certain leasing subjects, significantly increases their approval risks and leads leasing companies to an almost identical dilemma, as it does the banks… …outlined segments represents the framework of an efficient risk management system. 3 Management of Process and Decision Tools The objective of risk… …implementation. Experi- ence gained by the most developed financial groups showed that for an efficient and adequately control process (which needs to be in… …service to protect assets and achieve a competitive advantage), it is necessary to develop an IT supported appli- cation. We will call this type of… …be generated. To be functional, the “front-end” application needs to, at least, contain: – An established centralised system for monitoring… …leasing request processes, – An established automated counter of days of retention of application with sales staff and risks, with an independent status… …rulebook on authorisations in the leasing company. Generally, financial institutions that deal with any kind of crediting need to have an approved… …an evaluation of the real market value of the leasing sub- ject. Actually, the evaluation of the real marketable value of the leasing subject…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Contribution by Internal Audit to IT Compliance

  Thomas Lohre

  …governance is not an internationally standardised body of rules and regulations, but rather, with the exception of a few internationally accepted, common… …rules, they are a country- specific understanding of responsible business management.33 An important mile- stone for Germany was the adoption of the DCGK… …pursuant to Article 161 AktG (German Companies Act), the management board and supervisory board establish, on an annual basis, whether the recommendations… …against risks that threaten the company’s existence. The requirements of Section 404 of the Sarbanes Oxley Act (SOX) for the establishment of an internal… …can therefore be understood as an element of functioning risk management within a company, whereby risk management generally has the aim of effectively… …point in time of non-IT-compliance is reached significantly later this way t¬C(2). Further- more, an improvement in performance takes place with a time… …Monitoring and supervisory function: Effective IT processes through effective controls Compliance with duties must be checked. It is an essential function… …and ensure creditworthiness. 5 Promotion of IT Compliance by Internal Audit When viewed in isolation, the fact that a company has an internal audit… …two models, with the last option, it must be considered that internal audit loses its independence. This results in an independent and objective audit… …. Contribution by Internal Audit to IT Compliance 71 Figure 3: Audit risk with risk-oriented audit50 Audit risk, as such, cannot be determined on an…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Governance Works, in Principle

  Neil Baker

  …mindless box-ticking. 3 What About Management? And what of senior executive and management performance? A recent report from an all-party parliamentary… …“lacked an effective forum in which senior business managers and risk managers could meet to discuss emerging issues frequently; some lacked even the… …directors are lacking information and asking the wrong questions, for example, or if the board cannot grasp an organisation-wide view of risk, internal…

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• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  Audit Marketing

  Dr. Hannes Schuh

  …part of the audit universe, but this will not be discussed further here. ___________________ 89 Dr. Hannes Schuh is an audit manager in an Austrian… …beyond specific audits. In terms of an audit employee concept, the German Institute for Internal Auditing views this as follows93: In addition to… …, information. An analysis of the structure of supply and demand by competitive situation (mo- nopoly, oligopoly and polypoly) produces the following… …IA’s expertise (audit system) View of audit system Table 1: Audit customers Schuh 144 Customer Benefits An initial rough assessment of the… …any issue and goes far beyond financial and regularity aspects. – The selection of issues takes place on a risk-oriented basis and goes far beyond an… …managers o follow-up Advice outside of an audit includes: – lectures, – workshops, – advisory meetings, – reflections about concepts, etc… …task is to select, plan an implement suitable measures and is to be performed by the audit manager. May this article encourage management…

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