How do you do due diligence in internal Audit ?

Organizations often underestimate the challenges associated with the acquisition or divestiture of a company or line of business. Without IA’s insight, costs could range from a loss of opportunity to additional investments required to fix the issues that were missed.

How IA can help during strategic transactions

• 1) Provide increased visibility and transparency to key risks related to strategic transaction changes
• 2) Reinforce that risks and controls are the responsibility of management
• 3) Identify gaps in the integration or separation project management plan
• 4) Suggest opportunities for additional synergies that would boost the acquisition’s return on investment or cost savings as a result of the separation
• 5) Call out the impact that the acquisition and its integration, or the divestiture, may be having on other parts of the business
• 6) Highlight potential gaps in the internal control structure
• 7) Support management’s prioritization of risks of transition and organizational readiness for the effective and efficient allocation of resources to address the risks and controls
• 8) Provide increased visibility of process changes impacting management’s302 certification process.

Chief Audit Executives should work closely with their corporate development teams to involve IA during the entire strategic transactions life cycle:

• 1) Strategically, IA can determine an organization’s readiness for the transaction.
• 2) During due diligence, IA can alert the organization to potential risk, or control or regulatory issues that would cause the organization to overpay or undervalue.
• 3) Prior to deal close, IA can help prevent deal value leakage.
• 4) From a post-transaction perspective, having IA involved in critical components of the execution can create organizational efficiencies and ascertain proper control monitoring of new or changes in processes.
• 5) Finally, throughout the strategic transaction life cycle, IA can assess the management of the program to identify any improvement opportunities.

IA provides a critical perspective to strategic transaction deals that many executives may not consider. Without that perspective — right from the start —organizations could find out far too late that the price was not right, or that it has to spend a significant amount of money to fix issues that IA could have identified and helped the organization avoid.

The due diligence process (framework) can be divided into the following distinct areas:

1. Marketing audit
2. Legal/environmental audit.
3. Macro-environment audit.
4. Financial audit.
5. Compatibility audit.
6. Production audit.
7. Management audit.
8. Information systems audit.
9. Reconciliation audit.

Can Tqal due diligence in the internal audit through the application of · The objectives of the internal audit: With the main objective of the internal audit unit in any organization is to contribute to the achievement of the overall objectives of this regulation, the internal auditors seeking primarily to achieve the following objectives: 1 review and evaluation of internal control systems. 2. determine the extent of the commitment of project personnel policies and procedures. 3. protect the assets of the project 4. prevent fraud and errors, and if discovered what occurred. 5. determine the extent of reliance on the system of accounting and financial reporting, and to ensure that the information contained therein accurately reflect reality. 6. do regular and periodic audits for various activities, and report findings and recommendations to senior management. 7 determine the extent of the government's commitment to the project requirements social. 8. Evaluate the performance of individuals in general. 9 cooperation with the external auditor to identify areas of external audit. 10 participate in programs to reduce costs and establish the necessary procedures to them. And can be divided into internal audit objectives to two main goals: 1 goal of protection: This includes the goal to maintain the integrity of the following: The company's assets of various kinds, systems and financial and accounting procedures, policies and plans adopted in the company, records and documents and files and regular mechanism adopted in the project, a system of internal control ... etc. 2-D target: This goal in the audit function, which is the function of therapeutic and guidance dealing with inspection and audit tracking and identification and analysis of positive and negative results and to develop solutions to them and submit recommendations and proposals to the management as well as providing and supplying these management data and information about these results, which include all aspects of project activity. · Entrances internal audit: * Entrances to review the extent of compliance: * Entrances Review of operations: First: the entrances to review the extent of compliance: Targeting the review process of these approaches, to verify whether the workers in different administrative levels, has committed to the letter and spirit of the orders and instructions issued by senior management, and follow the proper procedures in the implementation of duty charges. This is done through a review of the three entrances are

1) Input Validation: Under this entrance looking for clues and references evidence to substantiate any process of reviewing it, and the references here are keen to gather information on the work of the project from a third-party neutral, such as: · - Balance certificate issued by banks. · - Messages and answers debtors and creditors. · - Re-valuation of the property by specialists. 2) the entrance to the review of documentary: References in this depends on the entrance of documents attesting to the health of the restrictions, and the corresponding legal conditions to be followed in the transactions and Alamilit.ubmogb this approach does not check references more than books, records and documents. 3) Review the entrance of systems: Focuses references and according to this entrance on the same system. So each system separately and examined and hosted by trying to link it with other systems. In order to verify that the systems in place are working correctly. And achieve the purpose for which they are developed for.

It was said all of this there must be a list of internal audit in the company until Sir audit procedures and examination by the laws in force in the company:

I Agree with the answers given by my colleagues.

Internal Audit mainly concentrate on:

1. Cash inflows and out flows in the real sense.

2. Stock/Inventory verifications

3. Manipulations /misappropriations in day to day functioning.

4.Cash and Bank Checking

5. Management reporting at periodic frequencies

agreed with gentlemen