Internal Audit Service in the UAE
The UAE has a strong internal audit profession with the Internal Audit Department overseeing government entities, and many private sector companies having their own internal audit departments or hiring external audit firms. The Institute of Internal Auditors also has a local chapter that provides professional development opportunities and networking events. The CIA certification is highly valued by employers in the UAE.
The objectives of Internal Audit
Internal audit objectives include evaluating and improving the effectiveness and efficiency of internal controls, identifying and managing risks, ensuring compliance with laws and regulations, providing assurance to management, identifying process improvements and cost savings opportunities, promoting best practices, and providing independent and objective assessments of the organization's operations and ethical standards.
- Evaluate the effectiveness and efficiency of internal controls, risk management, and governance processes
- Identify and assess risks to the organization's operations, assets, and reputation
- Ensure compliance with laws, regulations, and internal policies and procedures
- Provide assurance to management that financial reporting is accurate and reliable
- Review and monitor operations to identify opportunities for process improvements and cost savings
- Facilitate the implementation of best practices and continuous improvement throughout the organization
- Provide independent and objective assessments of the organization's operations, performance, and adherence to ethical standards
- Improve overall performance and reduce risk across the organization .
1. Internal Auditing Methodology
Defining the Scope of Internal Audit
Internal audit is a function within an organization that provides independent and objective assurance and consulting services aimed at improving the organization's
operations. The scope of internal audit can vary depending on the size, complexity, and nature of the organization, as well as the specific requirements of stakeholders, such as regulatory bodies, board members, and management.
In general, the scope of internal audit can be defined as follows:
- Risk Management: Internal audit should assess the effectiveness of the organization's risk management practices by identifying and evaluating risks, determining the likelihood and impact of those risks, and assessing the adequacy of the organization's risk mitigation strategies.
- Governance: Internal audit should evaluate the organization's governance structure, including the effectiveness of the board of directors, the management team, and internal control systems, to ensure that they are operating effectively and efficiently.
- Compliance: Internal audit should ensure that the organization is complying with relevant laws, regulations, and internal policies and procedures.
- Operations: Internal audit should evaluate the effectiveness and efficiency of the organization's operations, including financial reporting, operational processes, and IT systems, to identify areas for improvement and recommend best practices.
- Fraud: Internal audit should assess the risk of fraud within the organization and investigate any suspected fraud cases.
- Strategic Planning: Internal audit should assess the organization's strategic planning process to ensure that it is aligned with the organization's goals and objectives.
- Performance: Internal audit should assess the performance of the organization against its goals and objectives and recommend ways to improve performance.
2. Internal Audit Plan Based on Risk
A thorough audit strategy will be developed in consultation with management, with areas prioritized based on the risk category and the nature of the function. Broad topics to be covered (may vary based on industry and management preference)
- Admin & general Operations, etc .
- Fixed Assets
- Information Technology Infrastructure.
- Procurement of Goods/ Services
- Statutory Compliance