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What is the role internal auditing in preventing, detecting, and investigating fraud?

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Question added by Maya Salameh , Senior Accountant , Royal Jordanian Airlines
Date Posted: 2017/02/14
khushboo panchal
by khushboo panchal , ACCOUNTANT , M/ S SAGAR GOLCHA & COMPANY CHARTERED ACCOUNTANT FIRM

 

The role of internal audit is to provide independent assurance that an organisation's risk management, governance and internal control processes are operating effectively.

CHATHURIKA DARSHANI  KANKANAMGE
by CHATHURIKA DARSHANI KANKANAMGE , Manager (Audit & Advisory) , B. R. De Silva & Company

Main objective of internal auditing is to check whether internal controls implemented in a company is effective and efficient. And also it helps to detect occurred frauds and errors and possible frauds and errors. After that it helps to create adequate internal controls to prevent possible frauds and errors.

Abdullah Aziz Eldain Morsi  Elgendy -        CMA  Candidate
by Abdullah Aziz Eldain Morsi Elgendy - CMA Candidate , Regional Receivable Accountant , Amiantit Group of Companies

 thanks for your invitation

 internal auditing best serve as a resource and play an integral role in fraud prevention and detection? The Institute of Internal Auditors International Standards for the Professional Practice of Internal Auditing (Standards) pertaining to fraud and the internal auditor’s role in detecting, preventing, and monitoring fraud risks and addressing those risks in audits and investigations include:

IIA Standard 1200: Proficiency and Due Professional Care 1210.A2 – Internal auditors must have sufficient knowledge to evaluate the risk of fraud and the manner in which it is managed by the organization, but are not expected to have the expertise of a person whose primary responsibility is detecting and investigating fraud.

IIA Standard 2120: Risk Management 2120.A2 – The internal audit activity must evaluate the potential for the occurrence of fraud and how the organization manages fraud risk.

IIA Standard 2210: Engagement Objectives 2210.A2 – Internal auditors must consider the probability of significant errors, fraud, noncompliance, and other exposures when developing the engagement objectives.

In addition to several Practice Advisories that The IIA has issued regarding fraud, IIA Standards also require CAEs to include significant risk exposure and control issues, including fraud risk, in the periodical report to senior management and the board.

DEEPAK K I
by DEEPAK K I , Sales Executive , Penta

An effective internal auditing system will help to detect and prevent ;

  * Misappropriation of cash

  * Misappropriation of goods

Amr Selim
by Amr Selim , Personnel & Administration Supervisor , Spanish Egyptian Gas - Segas Egyptian

The internal auditor should report to executive management for assistance in establishing direction, support, and administrative interface; and typically to the audit committee for strategic direction, reinforcement, and accountability. The internal auditor should have access to records and personnel as necessary, and be allowed to employ appropriate probing techniques without impediment. Objectivity is a mental attitude that internal auditors should maintain while performing engagements. To maintain objectivity, internal auditors should have no personal or professional involvement with or allegiance to the area being audited.

Mohamed matar
by Mohamed matar , Finance Manager , ASG Group

thanks for the invitation

Auditing plays an important role in detecting fraud and manipulation through its role in reviewing the data and follow the correctness or not

Through the experiences of the financial auditor in those Alamagliat

And other rules for financial auditing standards

Rose Chisha
by Rose Chisha , Internal Auditor , ABInbev Group - Zambian Breweries

The role of Internal auditors in the detection and prevention of fraud is to assist management with the evaluation of internal controls used to detect or prevent fraud, evaluate the organization's  fraud risk assessment of, and perform fraud investigations. Management is responsible of designing internal controls to prevent, detect, and mitigate fraud. Internal auditors assess the effectiveness of the controls implemented by management.

Ayman El Saheb
by Ayman El Saheb , Risk Management Project Director , Canal Sugar

Internal Audit's primary role is to provide an objective and independent assurance and consulting service designed to add value to an organization. The detection of fraud is part of what we do, however it is not the main emphasis of our approach.

Atif Mekki
by Atif Mekki , Chief Accountant , Workforce Energy Contracting

It is a common phenomena in warehousing. But you need to address such discrepancies in two ways

1) Correct the variance by passing the stock JV - off course through approval mechanism.

 

2) Arresting the causes of variance / mismatch - the causes may be as under

 a) under receipt  - receiving less stock as against mentioned in GRN

 b) Over dispatch - dispatch more stcok as against dispatched invoice

c) Pilferage - security risk

 

You need have a check on all above aspect. You can implement the practice of cycle count at least for A category product.

You need to improve the stock telling system while receiving and dispatching.

 

Ahmed mohsen
by Ahmed mohsen , Senior Accountant , Main Poly Clinic

Internal auditors support management's efforts to establish a culture that embraces ethics, honesty, and integrity. They assist management with the evaluation of internal controls used to detect or mitigate fraud, evaluate the organization's assessment of fraud risk, and are involved in any fraud investigations.

 Although it is management's responsibility to design internal controls to prevent, detect, and mitigate fraud, the internal auditors are the appropriate resource for assessing the effectiveness of what management has implemented. Therefore, depending on directives from management, the board, audit committee, or other governing body, the internal auditors might play a variety of consulting, assurance, collaborative, advisory, oversight, and investigative roles in an organization's fraud management process.

Deleted user
by Deleted user

As an independent body in proper auditing, the company has an assurance that all financial statments are accurate and credible or truth. All must be actively control and monitor all various accounts (cash and non cash) in every day-to-day operations.