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Internal auditor cannot play decision-making role in purchasing transaction. Only he has to make sure that the proper policies and internal controls are being considered during this transaction
An internal auditor audits historical transactions which may result in modefying related policies and procedures. In this way he/she may in-directly affect a purchasing transaction. On the other hand different staff members may approch the internal auditors for an advice regardin the compliance of thier transactions and that also may be considered as an indirect impact on the day to day decision making.
Conceptuall, the responsibility of the day to day transaction remains with the staff members carring out these transactions and not with the internal auditor if he/she participated in the process.
Internal Audit is important for internal checks and balances, can support the procurement department by providing data about past purchases and can help in decision-making but does not have a "role". Not all projections can be100% perfect as at times sales may be higher than projected and planned raw material may not be enough necessitating urgent purchases either from secondary sources or from the open market. In many cases, companies do not have financial resources to match inventory requirement and in spite of very effective inventory planning, shortages are caused. One recent example in case of our company is that the factory of our main manufacturer of some products in Taiwan was totally destroyed by fire. We did have secondary sources but had placed our ourder for the entire year with this manufacturer. Due to their difficult position, they could not inform us about this disaster in time. As a result, we had to rely on on our secondary sources. There was no shortage but we indeed had problems and had to play slightly high price as we had not made any purchases from the secondary source. This source has now become our primary source and from our second order our prices are the same as were offered by the primary manufacturer. Internal audit therefore had to be over-ruled to ensure smooth supply of our products in the market.
The internal Audit don't have the role to make up any call in the company but he / she is only advisor and controller role to reach up that company policy applied and try to reach up for the ideal frame work can be applied for the best of the company.
no. internal auditor must not participate in any operating role.
no the interenal audit consulting and assurance activity .
