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looking at the controls 
in the travel 
claim section to see if they are working properly. This is not the same as looking at the travel 
claims themselves. For example, one of the internal controls might be that a clerk checks the 
addition on the travel claim and initials a box to say that they have done so. If they fail to perform 
this arithmetic check, then there has been a control failure – regardless of whether the travel 
claim had, in fact, been added up correctly or incorrectly.
(b) When 
conducting 
substantive tests
,
the internal auditor is examining figures which they have 
extracted directly from the company's financial records. For this sort of test, the auditor is 
concerned only with establishing whether or not the figure in the ledger is correct. They are not 
concerned as to how it got there.
A transactions or probity audit
aims to detect fraud and uses only
 
substantive tests. 
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CHAPTER 9
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CONTROL, SECURITY AND AUDIT 
 
245 
3.8 Accountability
The internal auditor is accountable to the highest executive level in the organisation, preferably to the 
audit committee of the Board of Directors. There are three main reasons for this requirement. 

The auditor needs access to all parts of the organisation. 

The auditor should be free to comment on the performance of management. 

The auditor's report may need to be actioned at the highest level to ensure its effective 
implementation. 
3.9 Independence 
Given an acceptable line of responsibility and clear terms of authority, it is vital that the internal auditor 
is
and is seen to be
independent
. Independence for the internal auditor is established by three things. 

The responsibility structure 

The auditor's own approach 

The auditor's mandatory authority 
Internal audit requires a highly professional approach which is objective, detached and honest. 
Independence is a fundamental concept of auditing and this applies just as much to the internal auditor 
as to the external auditor. The internal auditor should not install new procedures or systems; neither 
should they engage in any activity which they would normally appraise, as this might compromise their 
independence.