Page 115 - Rižnar, Igor, and Klemen Kavčič (ed.). 2017. Connecting Higher Education Institutions with Small and Medium-Sized Enterprises. Koper: University of Primorska Press
P. 115
Internal Audit in the Financing of Companies
Table 6.2 The Example of Part of the Internal Audit Report: Internal Audit
Recognized Opportunities for Improvement
Result of the audit The company does not have a regular analysis of the fi-
assignment nancing of subject and does not respect the principles of fi-
nancial policy and financing rules.
Recommendation of Preparation at least quarterly analysis of financing and
the internal auditor cash flows and reports on compliance with the principles
of financial policy and financing rules, which allow imme-
diate action in case of failure to achieve the objectives and
clearing up problems.
Action of the company Installation of system solutions in a computer program
to output at least quarterly analyzes and reports on com-
pliance with the principles of financial policy and funding
rules, which are a financial analyst regularly sent to the
chief financial manager.
Due date 60 days from the issuance of the final report.
Responsible person Chief financial manager.
for improvement
The internal auditor shall establish and maintain a monitoring sys-
tem of response to the findings, which are delivered to the management
(‘International Standards for the Professional Practice of Internal Au-
diting’ 2012, Standard 2500).
The chief audit executive must establish procedures for subsequent
monitoring and ensuring that the management’s actions have been ef-
fectively implemented or that senior management has accepted the risk
if not (Standard 2500.a 1).
The aim of the internal audit is realised when all the irregularities
and measures have been removed. If one of them is not eliminated, for
example because of the unacceptable costs of realisation or other rea-
sons, this means that the auditee adopts a certain risk that it is not
controlled. If the level of risk is not acceptable to the auditor, the su-
pervisory authority must be informed (Koletnik 2007, 201).
Table 6.2 shows an excerpt from an example internal audit report.
Conclusion
The internal auditor should be independent and objective according to
the professional internal auditing standards. Operations in the com-
pany have financial consequences. Financing the company should be
according to the law – if it is not so, the consequence is the insolvency
113
Table 6.2 The Example of Part of the Internal Audit Report: Internal Audit
Recognized Opportunities for Improvement
Result of the audit The company does not have a regular analysis of the fi-
assignment nancing of subject and does not respect the principles of fi-
nancial policy and financing rules.
Recommendation of Preparation at least quarterly analysis of financing and
the internal auditor cash flows and reports on compliance with the principles
of financial policy and financing rules, which allow imme-
diate action in case of failure to achieve the objectives and
clearing up problems.
Action of the company Installation of system solutions in a computer program
to output at least quarterly analyzes and reports on com-
pliance with the principles of financial policy and funding
rules, which are a financial analyst regularly sent to the
chief financial manager.
Due date 60 days from the issuance of the final report.
Responsible person Chief financial manager.
for improvement
The internal auditor shall establish and maintain a monitoring sys-
tem of response to the findings, which are delivered to the management
(‘International Standards for the Professional Practice of Internal Au-
diting’ 2012, Standard 2500).
The chief audit executive must establish procedures for subsequent
monitoring and ensuring that the management’s actions have been ef-
fectively implemented or that senior management has accepted the risk
if not (Standard 2500.a 1).
The aim of the internal audit is realised when all the irregularities
and measures have been removed. If one of them is not eliminated, for
example because of the unacceptable costs of realisation or other rea-
sons, this means that the auditee adopts a certain risk that it is not
controlled. If the level of risk is not acceptable to the auditor, the su-
pervisory authority must be informed (Koletnik 2007, 201).
Table 6.2 shows an excerpt from an example internal audit report.
Conclusion
The internal auditor should be independent and objective according to
the professional internal auditing standards. Operations in the com-
pany have financial consequences. Financing the company should be
according to the law – if it is not so, the consequence is the insolvency
113
