An Introduction to Internal Audit
It is commonly thought that an internal auditor’s job is to catch people doing something wrong. In fact an auditor’s main aim is the reverse. It is to provide an objective opinion on whether people are doing things right. Only if needed will auditors make recommendations for changes and these are made with the primary intention of working with managers and staff to help stop problems occurring in the first place. Prevention rather than blame is therefore what the auditor is seeking.
An internal auditor’s main role is to provide independent assurance (to the Director of Resources, councillors, chief officers and/or school governors) about the quality of controls that managers have in place. Where things are considered wrong, this is nearly always a judgement on the system rather than a criticism of the individual running the system. If necessary auditors will recommend improvements which should be made to the controls guarding against important risks. Risks are inevitable especially in an organisation the size of the County Council. The aim of the auditor is not to eliminate financial risk at any cost but to agree ways to bring it down to an acceptable level.
The work of internal auditors, who are employees of the County Council, is also assessed and used by the external auditors, who are appointed by the Audit Commission to audit and certify the County Council’s accounts.
Most audits are carried out based on the audit annual plan. Because of the sheer size of possible areas of financial risk, the plan has to be based on an assessment of where the need for detailed review is highest. Coupled with these detailed audits is also a programme of management self assessments and communication to staff about risks and controls. This highlights difficulties commonly faced by managers and staff, with recommendations to overcome them.
With so many staff being involved in not just financial administration systems but also work that has important financial consequences, things sometimes do go wrong. Where serious problems have occurred or serious concerns have been raised, internal auditors may be asked to carry out a special investigation. An investigation will endeavour to establish the facts behind the problem and make recommendations on what can be done to correct the problem as well as prevent it happening again. The auditor may also need to make a recommendation to management on whether disciplinary action or police involvement is needed.
With limited numbers, internal auditors cannot be everywhere. It is therefore important that where staff believe that financial malpractice is going on, they have a means to raise their concerns. There are a number of routes by which they can choose to do this including raising the matter with the Head of Audit. Details are provided on CIS’s policy and guidelines section under Raising Issues of Concern. The Audit page on the web and CIS also contains contact details and further information about fraud investigation procedures. The Audit page also has a lot more information on the Section, how we would work with you when we carry out an audit and advice to managers on how to do self assessments.
If you want to know more about the work of Internal Audit contact the Head of Audit, on (0116) 305 7618
Page Last Updated: 1 March 2008