1 Pertemuan 9 Department Organization Matakuliah:A0274/Pengelolaan Fungsi Audit Sistem Informasi Tahun: 2005 Versi: 1/1.
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1 Pertemuan 9 Department Organization Matakuliah:A0274/Pengelolaan Fungsi Audit Sistem Informasi Tahun: 2005 Versi: 1/1
2 Learning Outcomes Pada akhir pertemuan ini, diharapkan mahasiswa akan mampu : Mahasiswa dapat menjelaskan department organization.
3 Outline Materi Introduction –Strategic Objectives Mission Statement Why a Procedures Manual Major Challenges of the department –Essence of Internal Auditing –Quality Assurance Reviews of Internal Audit –Outsourcing Internal Audits –Control Self-Assessment –Integrating the Auditing Process Corporate Audit Charter
4 Introduction In order to achieve the goal of a world- class internal audit organization, standardized procedures must be developed and followed by the staff.
5 Strategic Objectives Internal audit consists of people and procedures.
6 Mission Statement From the mission statement, the internal audit department (in conjunction with management) should establish strategic objectives to reach the mission.
7 Why a Procedures Manual The mission statement, objectives, goals and procedures of the internal audit department need to be documented in such a way that the resulting document can be used as a reference manual.
8 Major Challenges of The Department In most cases, the procedures involve reviewing and evaluating controls, efficiency, effectiveness and other aspects of the business. Efficiency generally relates to measures of operations or delivery of services, especially as a ratio of inputs to outputs. Effectiveness is a measure of how well the organization meets its goals. Effectiveness usually focuses on strategy and improvements to decision making. Auditor productivity requires the development of a proactive spirit, a high degree of professionalism and measurement techniques, including budgets and time reporting.
9 Essence of Internal Auditing One of the major challenges of audit management is contributing to the organization’s mission. It is often noted that internal auditors do not create,make, find or deliver the organization’s products or services. Company management will periodically examine the contribution of the internal audit program.
10 Measuring efficiency in internal audit is generally a simple and feasible process. Measuring the inputs – labor hours or some other quantitative measure – is relatively simple. But outputs need to take on relevance to the organization rather than a simple number of audits conducted or ignoring outputs and simply quantifying inputs. Effectiveness is quite different.
11 Based on the definition of effectiveness, management of internal audit should first establish a reasonable, achievable and relevant mission statement, with appropriate accompanying goals and strategies (both must be measurable). This mission should be compatible with the organization, culture, management’s goals and objectives, and professional responsibilities.
12 Then effectiveness becomes a measure of how well internal audit accomplishes the mission, as measured by how well it is reaching its goals associated with the mission statement. This measure is the one with which corporate management will be most concerned.
13 To function effectively, internal auditors and the customers of audit services should possess a similar understanding of what makes internal auditing a value-added activity.
14 Quality Assurance Reviews of Internal Audit Recently, quality assurance reviews of internal audit functions have been on the rise. This internal or external review is a very positive development for internal auditing as a profession.
15 Outsourcing Internal Audits As noted earlier, internal auditing management requires a proactive approach, good personnel, personal development programs, structured procedures, a mission, short-term and long-term objectives, quality assurance reviews, productivity measures and so on. Audit contribution is very difficult to measure!
16 Control Self-Assessment Most line managers are concerned about controls over their operations and have a basic knowledge of control issues related to their function of operation. In the current marketplace, all organizations are affected by global competition, as well as demands for greater accountability. Customer- focused organizations are attempting to reengineer systems and eliminate activities that do not add value to customers.
17 Integrating The Auditing Process The core process in an internal auditing function is the auditing process.
18 Corporate Audit Charter Audit departments should operate pursuant to a written charter indicating the purpose, authority, duties and responsibilities of the function.
19 Policy Statement The Audit Department will review the effectiveness and efficiency of operations and organization structures.
20 Responsibility of The Director of Auditing The Director of Auditing is responsible for properly managing the department so that: –Audit work fulfills the purposes and responsibilities established herein –Resources are efficiently and effectively employed –Audit work conforms to the Standards for the Professional Practice of Internal Auditing.
21 Reporting and Relationship of Audit Committee The Director of Auditing will report to the Audit Committee for approval of audit scope, policy and administration. The Director will report in writing on all internal reviews conducted in the Corporation and will attend the Committee meetings to report on significant recommendations and the operations of the internal audit function.
22 Independence Independence is essential for effective operation of the internal audit function.
23 Scope of Audit Activities Audit coverage will encompass, as deemed appropriate by the Director of Auditing, independent reviews and evaluations of any and all management operations and activities to apprise: –Measures taken to safeguard assets including tests of existence and ownership as appropriate –The reliability, consistency and integrity of financial and operating information –Compliance with policies, plans, standards, laws and regulations that could have significant impact on operations –Economy and efficiency in the use of resources
24 –Effectiveness in the accomplishment of the mission, objectives and goals established for the Corporation’s operations and projects.
25 Access and Confidentiality In accomplishing activities, the Directors of Auditing and their staffs are authorized to have full, free and unrestricted access to all Corporation functions, activities, operations, records, data files, computer programs, property and personnel. It is expected that Directors of Auditing and their staffs will exercise discretion in the review of records to ensure the confidentiality of all matters that come to their attention.
26 Responsibility for Corrective Action The manager or head of the division, department, unit or site audited is responsible for either planning or taking corrective action on recommendations made or deficient conditions reported by auditor.
27 Limitation of Authority and Responsibility In performing their functions, the Director of Auditing and corporate audit staff members have neither direct authority over, nor responsibility for, any of the activities reviewed.