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Internal Audit
11-17-2004, 06:01 PM,
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I am completing my articles in one of the best c.a firm in Pakistan and engage in internal audit from last 8 months and i think it's really a great experience for a person who is going to be a c.a in future. As in external audit u are just concerned with the figures and other assertions but u forget other important areas of business, but internal audit gives u a comprehensive knowledge of the client's business and u really understand the business and it's functions and especially u evaluate internal control systems and this gives a more knowledge than external. I have conducted internal audits of very large organisations and after this i feel if i have been on external audit of these clients then i may have forgotten other aspects of the business if i was on external audit.
any comments?
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I am surprised Augustus that you completed your articles from one of the best ca firm and you are saying that you missed to evaluate the internal controls being on external audit.
During the course of external audit, we evaluate the internal controls specially on Sales, purchase and material issuance, receipts
and payments etc, using the CAFs.
In my opinion being external auditor you have different powers so you can evaluate the system and can include weaknesses in your ML but being internal auditor your status is of employee and you face the situations as mentioned by Ehrar_ACMA.
Take care.

Ooooh, waisay 2 days ago, there was Eid of Muslims. "Eid Mubarak" you all.

11-18-2004, 06:02 AM,
Dear smraza, i didn't say i missed to evaluate internal control on external audits but what i meant was no body evaluate internal controls in that much extent as one can on internal audit, as on external audits u have a time constraint and u overlook many circumstances, just to meet ur time contstraints and especially in pakistan u are provided with books of accounts which are specifically maintained for tax and audit purposes where as in internal audit u work with the original books of accounts. don't u agree with me?

11-18-2004, 02:09 PM,
Agreed <img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle>

11-18-2004, 03:52 PM,
OMG 'books of accounts !' u mean more than one set ??

Just kidding,, well those do exist but I guess more of in the 'local companies' I for one had always longed to audit such a company in my articles tenure.. but never got the opportunity. I had a friend who articled at a large National practice (with a good share of SECP clients) and the tales he had on 'sets of books' maintained !

Another legit. piece of financial information which the external auditors are restricted to be privy to are 'strategic management accounts/statements/forecasts', I'd come across instances where such information (specially detailed analysis) was refused to the external auditor on grounds of 'business secrecy'.
11-19-2004, 03:51 PM,
Dear fella's
i agree with u. Internal audit focuses mainly on the operational aspects For instance business risk assessments, CSAs, suggesting ways for improvment and yeah u don't necessarily have to be a qualified accountant to perform well...though it do require a certain degree of financial background and a person having more comprehensive knowledge of the business, operations wud be able to do the job more effectively rather than a qualified accountant.

Internal audit surely provides a better chance to develop a more thorough understanding of the internal control systems, assessing its adequacy & efficacy, helping the management in ERM.<font face='Century Gothic'></font id='Century Gothic'><font size=6></font id=size6><font color=navy></font id=navy>

O Lord! Increase me in knowledge...Ameen!

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