Internal Audit

Introduction. Purpose. Tasks. History. The audit appearance. Audit in Lithuania. Meaning of audit in the current stage of economic development. The audit definition, meaning and objectives. Definition. Meaning. Objectivities. Internal audit. Functions. Responsibilities. Internal audit phases. Internal audit planning and strategy. Internal audit planning and strategy general provisions. Types of internal audit plans. Information gathering and processing. Evaluation of information. The audit report preparation and presentation. Post-audit activities. Internal Audit Service and its activities. Head of Internal Audit activities and responsibilities. Internal auditors inspect and employee relations. Internal Audit Service job evaluation. The internal audit team and its relations. Risk assessment of internal audit. Internal auditors' professional code of ethics. Internal Audit Association. The main purposes. Findings. Data sources.

Find out how audit appeared, when it appeared in Lithuania and its meaning in the current stage of economic development.

Find out the definition of audit, its meaning and objectives.

Find out what is internal audit, its functions, responsibilities.

Find out what is

Find out what is Internal Audit Association and its main purposes.

The audit as a form of control, the most similar to the current, appeared when the companies began to dispose of the share capital. Corporate managers seeking to raise equity capital needed to confirm their company's financial statements for the authenticity and veracity. Such approval could be granted only by highly qualified independent accounting experts. Another important fact have led to the emergence of the audit were company’s managers dishonesty, the desire to conceal the true financial position, to manipulate profits, dividends, share value and other indicators amounts to selfish purposes. Accountants were the first who began to protect the interests of shareholders: they began to create professional organizations and require that governments legitimize their activities. The world's first professional accounting organization was founded in Scotland in 1854, 23 October. It was the Edinburgh Accountants Association, which later become royal charter and its members were called chartered accountants. This experience quickly filled the England and 1870 1890 similar organizations (associations, institutes) was formed in to the United States, Canada, Australia. The market economy creation accelerated the emergence of the audit. It clearly stands out the interests of those who are directly managing the company (management), and those who want to invest money in the company. Investor requires that information about the company's activities will be confirmed by independent experts (auditors). It should be noted that in none of the country with planned economy has been an independent audit.

Meaning of audit in the current stage of economic development

Audits are gaining importance and popularity, the demand is increasing due to modern dynamic business conditions. This is primarily explained by the following arguments. Good audit:

Increases business partners and the public's trust of the company;

guarantees that employees trust management, closer co operation to achieve the objectives;

strengthens the company's management policy of justice making important management decisions, entering into new business transactions, obtaining loans, etc.;

ensure greater investor interest in the activities of the company and its prospects;

given all the information consumers a guarantee that the company's assets, financial, management, internal control system is good.

The audit is one of the most important and most reliable sources of economic information. It has a great impact for the company's internal control system, strengthening financial and management accounting, to reveal internal reserves, to plan and predict company's activities. Auditing is a certain guarantee that the company carries out its activities normally to follow the objectives. It protects against various manipulations, fraud and financial reporting fraud and help ensure economic stability. The audit is important not only for a specific enterprise, but also for the economy of the country.

In general terms, audit is independent review and opinion statement about a certain thing or object. There are several important thing in this definition: 1) The audit is a checking. It is a form of control when checking certain objects. 2) The audit is an independent verification. It is done by certified auditors who are completely independent of anyone's will or influence. 3) Audit is a particular object (eg., financial statements, company’s activities, control systems, etc.) inspection. 4) The audit is the opinion statement of the inspected object. It is expressed by the auditor after the audit.