Terms of Internal Audit Engagement (SIA-8)

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Terms of Internal Audit Engagement (SIA-8)
  • Elements of Internal audit :
    • Scope
      • Should describe internal audit definition
      • Broad areas of work governance, continuous process appraisal etc…
      • Should detail internal audit dose not result in expression of opinion & does not involve in preparation of financials.
    • Responsibility
      • Mention management is responsible for effective internal controls
      • Management is responsible to provide information.
      • Mention the specific responsibilities arising to internal auditor due to law or professional standards.
    • Authority
      • Auditor should have authority to access info., records etc..
    • Confidentiality
      • Ownership of audit working papers lies with auditor.
      • Internal audit engagement also subject to peer review
      • Internal audit report shall be confidential as agreed upon.
    • Limitations
      • Mention that the internal auditor or his employees shall not be liable to audited in excess of compensation.
    • Reporting: Reporting frequency and manner.
    • Compensation
      • Clear understanding of terms of payment
      • Reimbursement of out of pocket expenses.
    • Compliance with Standards: Audit is carried in accordance with professional standards.
    • Effective Dates: As agreed upon.

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