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Unit 6: Internal and External Audit

Notes
There are several procedures to be strictly followed by the supervisors of the internal
audit in order to achieve the goal of the process.”
His Excellency, Ahmed Al Hammadi said, “Risk management is how to deal with future
events or facts that may lead to impede achieving the objectives of the ministries and
governmental bodies. The main goal of the risk management is to reach a clear strategy
and a specific methodology to identify threats to achieving objectives. Risk management
does not mean to completely overcome it, but to help senior management to limit the
risks and establish a mechanism to deal with the expected effects.”
He added, “The workshop is a start of a series of workshops which will be provided by the
joint internal audit and its strategic partner, KPMG, to federal ministries to spread the
culture of the Internal Audit in the Federal Government. These workshops also play a
significant role in building public awareness of risk management, the most important
global trend in running leading institutions. It is a call for Federal bodies to coordinate
with this sector to set up such workshops in the future.”
The Internal Audit covers several parts, including technical or operational audit. It looks
to effective use of economic resources, and ensures achievement of defined objectives and
financial auditing. It checks the credibility of the financial and accounting procedures.
In addition to information systems audit, it reviews the financial and accounting
information systems to control and assess its compatibility with policies and internal
control procedures.
The internal audit systems saw four stages of development since 1980, starting with the
stage of supervision audit and understanding of the processes and procedures in conformity
with the legislation. The second phase came after 1980, where the audit depended on the
supervision framework, risk identification and corrective action, in addition to the audit
of the operational and financial procedures, and its compliance with legislation. In the
third phase, after 1990, the auditing process improved to be an auditing on the basis of
risk.

And after 2000, the fourth stage came, where the audit started to work on the basis of risk
management, comprehensive development, common understanding of the activities used
and all the business risks of all types, in addition to auditing the activities focusing on each
operational session separately and identify the supervision type that must be followed.
The workshop discussed the concept of risk as an incident likely to affect the organization’s
ability to achieve operational or strategic objectives. The risks may be internal or external,
as they include the risk of missed opportunities. The objective of the risk assessment
process is to define the management style and the best way to identify and assess risks that
hinder achieving the fundamental objectives of the business, and to effectively address the
challenges and risks faced by the institution to achieve the desired objectives through
applying a sophisticated approach in risk management in accordance with the world
leading practices.
The risk assessment also helps the governmental bodies achieving the strategic goals on
the highest degree of efficiency and effectiveness, as the audit process focuses on the most
affecting risks that face the activities of the ministries and bodies.
Questions:
1. Discuss the case in brief.
2. What are the four stages of development since 1980?

Source: http://www.ameinfo.com/226511.html

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