These best practices were selected because of their proven, not theoretical, effectiveness by an informal panel of five experts in the field of internal auditing
. These experts had worked for the Defense Contractor Audit Agency, the IRS, Fortune 500 corporations, governmental agencies, states, counties, cities, universities, and public accounting firms.
* The director of internal auditing
reports to an individual in the organization with sufficient authority to
"Compliance-related issues are fueling demand for individuals with expertise in internal auditing
procedures and corporate governance regulations," said Max Messmer, chairman and CEO of RHI.
Both external and internal auditing
standards require only reasonable, not absolute, assurance of detecting corporate fraud by remaining alert to conditions where fraud is most likely to occur.
Sutton said he was concerned that, because internal auditing
traditionally has been a management responsibility, an independent auditor could not perform both the internal audit function and also provide a truly independent second look at the system of internal control.
With his first edition in 1942,Victor Brink began pioneering the fields of professional internal auditing
and operational auditing.
Audit committee requirements likely will be modified, and there may be internal auditing
reforms, as well.
Since the early 1990s, however, as many companies including larger entities reengineered themselves to focus on their core businesses, there has been a move to outsource various staff and support functions, including internal auditing
. For CPAs, these engagements--referred to in the professional accounting literature as extended audit services--often include helping perform a client company's internal audit activities or audit services that extend beyond the requirements of generally accepted auditing standards.
can contribute most effectively when there is an executive champion who ensures complete objectivity in all audit work.
Despite its importance, little guidance pertains to the challenges facing CPAs that have moved into internal auditing
as full-fledged internal auditors rather than as consultants or advisors.
The emphasis on internal auditing
may be due to bank audit committees' regulatory guidance.
But a lesser-known recruitment involves hundreds of former Andersen professionals in the internal auditing
and business risk consulting practices to a new firm called Protiviti Inc.