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Operational Auditing

Operational Auditing. Spring 2000. Control Objectives. Reliability and integrity of info Compliance Safeguarding of assets Economical & efficient use of assets Accomplishment of goals & objs. Risk Categories: Evidence of Risk. Inadequate information Failure to follow policies etc.

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Operational Auditing

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  1. Operational Auditing Spring 2000

  2. Control Objectives • Reliability and integrity of info • Compliance • Safeguarding of assets • Economical & efficient use of assets • Accomplishment of goals & objs. Operational Auditing--Spring 2000

  3. Risk Categories:Evidence of Risk • Inadequate information • Failure to follow policies etc. • Loss of assets • Poor use of resources • Failure to achieve goals & objs. Operational Auditing--Spring 2000

  4. Organizational Relationship • Reporting responsibility • As high as possible…the Audit Committee • Administrative responsibility • To a key interested party Operational Auditing--Spring 2000

  5. Roles of Internal Auditing • Auditing or assurance • System design & implementation • Performance appraisals • Consultations • Strategic planning • Merger & acquisition analysis • Market appraisals • Investment analysis Operational Auditing--Spring 2000

  6. Audit Committee History • NYSE: Suggests in 1940 • AICPA: Recommends in 1967 • FCPA: Strong imperative in 1977 • Treadway: Recommends requirement in 1987 Operational Auditing--Spring 2000

  7. Effective Audit Committees • Independence • Skills balance • Time availability • Tough-mindedness • Clear charter • Specific duties • Maintain documentation Operational Auditing--Spring 2000

  8. Role of Audit Committes • Financial reporting • Corporate governance • Corporate control • Treadway Comm. Compliance • Requires direct communication • Audit plans • EDP concerns • Special areas of risk Operational Auditing--Spring 2000

  9. Interaction with Auditors • Evaluate I/A staff • Review audit philosophy • Review control systems • Review plan and financial impact • Multi-year coverage comparison • Provide special requests • Assure free access for I/A • Support I/A independence • Oversight for logistics and status Operational Auditing--Spring 2000

  10. Ops. Audit as a Profession • Professional attributes • Exam • Standards • Statement of responsibilities • Inst. of Internal Auditors • Professional leadership • Technical resources and training • Code of ethics Operational Auditing--Spring 2000

  11. Departmental Operations • Level of reporting • Mission statement or charter • Adherence to prof. Standards • Professional conduct and demeanor • Compliance with cont. education Operational Auditing--Spring 2000

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