Acca aa s21 Notes

2. Internal audit functions
Here is the list of the typical functions of an internal audit department. There is nothing perhaps 
terribly surprising here, read each of the bullet points and understand them.
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Helps achievement of corporate objectives (how could a company make profits if it doesn’t 
safeguard its assets or properly record transactions?)
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Aids risk assessment and management.
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Improves efficiency, effectiveness and economy.
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Designs internal control system.
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Checks operation of internal controls system.
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Value for money audits.
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Tests IT controls.
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Liaises with external auditors/shares work.
It is perhaps the last three which you need to be particularly aware of. There is something called a 
‘value for money audit’. This isn’t so much looking at internal control but it is looking at efficiency and 
economy: could something be done more cheaply, more efficiently so that the company can make 
better profits? Or if the organisation is not-for-profit can it achieve more for the same amount of 
expenditure?
Testing information technology controls is also part of internal audit responsibilities.
And finally internal audit often plays a major part in liaising with external auditors and sharing work. 
Typically in very large organisations the external auditors do not visit every department or every 
branch, every factory or every outlet. Quite a lot of that audit work is carried out by the internal audit 
department and the external auditors will review the working papers and findings of internal audit. 
Generally the external auditors will move around to different departments and branches so that over 
a period of few years, external auditors have visited every part of the client.
September 2021 to June 2022 exams
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