Naslov
The Internal Audit Process: Risk-based Approach

Autori
Žager, Lajoš ; Tušek, Boris

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
MicroCAD 2003 International Scientific Conference 6-7 March 2003 Section Q: Company Competitiveness in the XII Century / - Miskolc : Innovation and Technology Transfer Centre, University of Miskolc, 2003, 137-142

ISBN
963 661 547 0 564 0

Skup
MicroCAD 2003 International Scientific Conference 6-7 March 2003

Mjesto i datum
Miskolc, Mađarska, 06.03.2003. - 07.03.2003

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
internal auditing; internal audit process; risk assessment; internal audit planning; risk based internal auditing

Sažetak
Concurrent with efforts that management of some companies make to improve the quality of management process, by being more concerned and devoted to achieving determined objectives and owner’s requirements, more efficient use of resources, better quality and environmental protection, ethics and greater responsibility, a new environment has been created in which the approach of internal auditors must change from the old conservative, scrutinised and passive auditing to a new proactive customer-focused orientation. In other words, a complete withdrawal from views and ideas according to which internal auditor’s report is perceived a final and sole product that an internal audit function in some company is able provide. On the contrary, internal audit department with its potentials has to turn towards the future, by providing advice based on anticipated of potential risks in particular business areas. One of the main roles of internal auditing from now on is to advise management how to manage these risks by defining and monitoring the appropriate system of internal controls in place to enable reduction of such risks. It is important to bear in mind that the principle of risk management incorporates the statement of essential proactive approach, where risks include not only dangers and threats in form of uncertainty in achieving expected results, but also chances and possibilities for the organisation to gain sustainable competitive advantage. It is therefore commonly emphasised that an efficient risk management is a source of added value for owners and other relevant parties. Internal audit’s participation and contribution in creation of added value by generating information necessary for identification, understanding and assessment of potential risks, are nowadays highly required world-wide. There is a requirement to ensure added value auditing which should result in a valid information basis in a form of consultation, advice, report and other communication modes, based on which management can analyse and manage risks successfully. In addition, there is a permanent role of internal auditor to continuously monitor the maintenance and improvement of a quality integrated system of internal controls as an instrument for risk management, and in agreement with management to correct highlighted weaknesses and problems of that system. Internal audit department must continuously develop new approaches in internal auditing, create new audit products and services in parallel with a more complex managing requirements that are faced today. Correspondingly, internal auditing will advance more towards anticipating risks in particular areas of business and to advising management on how to manage these risks by developing and monitoring the appropriate system of internal controls which will function as a preventive measure. Company’s operations in whole turned towards the future become an object of internal auditor’s audit. We could simply state that internal auditing is focused on wide company activities, and its goal is to provide assistance and support to management in fulfilling their many tasks and objectives, to prevent potential problems and to solve existing problems. It should be also said that internal auditing will not in any case review and analyse all parts and aspects of the company activities, but it will selectively conduct its reviews, based on risk ranking, directing it towards those elements of business that are more critical for the successfulness of the company in whole. This requirement largely determines the whole process of internal audit especially activities in the planning phase of the internal audit.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA