Purpose of the internal audit

Internal and external audit

Purpose of the internal audit

The internal audit function at London College of Business is to summarise to policies, standard and procedure

Responsibilities in the internal audit

The main responsibilities of the internal audit to develop the documents, implementation , test and comprehensive plan and provide assurance to the system of the internal control; to make sure that college policies, rules and regulation are complied with judiciously.

– Examine the accuracy for the financial transaction and applicable the laws and regulation and also compliance institution policies.

– To assure the internal control are present by evaluate financial and operation procedure.

– Evaluate access and identify the college risk area and in case of any uncertainty make sure and recommend the appropriate improvement for internal control, accounting procedure, research and adopt industry best practice.

– To identify the business risk and access those risk and put best practice management procedure, for all these procedure work with senior college leader to access all these points.

– Rely on the best practise which helps the higher education industry in access that LCB produce accurate and reliable information.

– The implementation and administration of LCB whistle according to policy response in a timely manner all submitted complaint submitted complaints

– Prepare the necessary report for the finance committee of the board.

– Research and response to the internal audit inquires from the board and the LCB president and other senior LCB management.

– Compete other projects and assign all these duties and responsibilities are assign by the LCB board and President.

Internal audit function in LCB

This section is about the internal audit function along the with responsibilities. In LCB internal audit describe the audit planning and scheduling, and also discuss the scope of internal audit; all types of internal audit generally perform in the LCB.

Scope of internal audit in LCB

The scope of the operation in internal audit is by itself very expensive. The internal audit function in the LCB assist the college in fulfil its vision, mission, strategy, planning and implementation of these rules and also adhere the adhere a core values by bringing a systematic and discipline approach and also help in improving the effectiveness of the enterprise- risk management, internal control and governance process.

Ultimately the internal audit functions help the LCB in;

– Identify and managed the appropriate the risks.

– Employee’s actions comply with the LCB policies, standard and rules.

– LCB resources are acquired thriftily, used efficiently and sufficiently safe guard.

– LCB continues focus on the quality standard and trying to put more effort beyond the last time to achieve maximum standard.

– Legislative and regulatory issues are impacting in the LCB and also are recognise and address appropriately.

Types of internal audit take effect in LCB

In ordered to prepare the LCB internal audit report, the most important point is that during determine the internal audit, need to decide the type of each audited. There are following type of audit which is generally audit.

Departmental audit

According to LCB departmental audit is aims to determine and evaluate the all activities and operation which happened in college. In LCB departmental audit keep assess on accounting control, and ensure all compliance gone through with college procedure, effectively and efficiently, and also applicable the laws and regulation, and up to date the audit and account balance to the audited.

Financial audit

In LCB financial audit ensure the accuracy and completeness of the record and account balance because financial audit utilize the substantive test and analytical review and other validation procedure which somehow can say, add function tests, and transaction review.

Financial audit in the LCB represent that whether the financial information in the college peform very well and also consider all activities, department and unit work under internal audit work fairly and represent financial report, result of operation, cash flow in the college and financial position of the auditee perform according to the Generally Acceptable Accounting Principles.

Operation audit

Like as other operation audit in LCB is deigned to evaluate the procedure and control which impact in achieving the goal and target in the college organisation. Operation audit also measure college policies and compliance along with define parameter and circumstance because LCB agenda is to provide better education and for better education, it is very important to monitor all those procedure, rules and regulation which define the characteristic of the student and among many other roles operation audit big role is to keep up to date all rules, regulation, procedure, system and all those factor which are part of the LCB building internally or externally.

Follow up audit

In LCB, follow audit mean to make sure whether correct action has been taken on previous audit recommendations. The value of this audit cannot be denied because this audit conducts after every six month when financial report issued.

Internal audit technique and procedure

During the audit LCB apply some technique to follow up the internal audit

a- Observation and enquiry

The internal audit observes the operation of the college function, departmental activity. LCB is well education institution and college never compromise on any small mistake that’s why college fully give right to internal auditor to call the inquiry if he found, college employee trying to carry out the internal audit.

b- Analysis and review

In LCB internal audit administrator; the college internal audit function is to find out the care full and critical review of both financial and operating data. But at some time it happened that it become difficult to analysis the current balance as compare to the prior period. In LCB, use another techniques to identify the and analysis the activities, is  that breakdown individual accounts in to their most refined details so that unusual and most signified item will  highlight and thus selected for investigation.

c- Inspection

At this stage, the LCB, authority has full right to inspect physical assets, documents and other documents supporting in relate to auditee review. This process in the college normally carries through following tools and techniques.

i- Vou——————————————————————– ching

This technique helps the college to ensure the accuracy, genuineness, validity, and truth eof the entire under review. In this technique entries comparing to the original documents on which they are basis.

ii- Re computation

In order to apply this technique an auditee footing adding machine tapes and spread sheet never assumed to be correct. In this technique re-calculate the selected calculation to identify their accuracy.

d- Confirming

The validity of items shown on College records is established by receiving directly confirmation from a third-party in a situation to verify the legitimacy of a known item. A requirement for such confirmations is mailed by the Internal Auditor and is to be accompanied by a return envelope addressed to:

Threats during the internal audit

The objective to identify the individual threats in the LCB is conduct by the internal audit, whether the suspect occur irregularity happened, and also determine the documents, source and amount involve. During the internal audit as college focus on the objectives and responsibilities on the report but by going through all process LCB never underestimate that there will come some threats, which effect on the college reputation, but somehow college has good history on the behalf of long experience in dealing such situation college not only focus benefits rather always consider the threats, such as

Misappropriation

Means any deceitful or imitation act which includes things such as;

1. Unauthorized use, taking, or destruction of the college property for personal use or purposely deprive the college.
2. Counterfeit or variation of checks, drafts, promissory notes, and securities.
3. Unauthorized use of college funds, securities, supplies or any other taking assets.
4. Counterfeit or modification of policy-related items, such as loan, assignments, and change in beneficiaries.
5. Any similar or elated irregularity.

Assets

Any kind of assets like money, negotiable securities data, and also physical property of the college, whether own or leased, all comes under threats.

Conflict of the interest

When LCB resources, including staff time, funds, college reputation or other assets are diverted or less effective in the college, in ordered to achieved purposed by virtue an individual activities.

Defalcation

LCB, appropriately assets deceitfully to someone own use. The synonymous of the defalcation is misappropriation.

Errors

Mistakes in financial and accounting data, any kind of errors may include;

1. Statistical or electrical mistake in fundamental the records and accounting statistics.
2. Misunderstanding or misinterpretation of facts;
3. Misapplication of accounting guiding principle.

Fraud

The misappropriation or misuse of the college assets, or some others irregularity frauds may involve;

1. Manoeuvring, prevarication, or alteration of records, or documents.
2. Misappropriation of the college assets.
3. Any kind of recording transaction but without any substance.
4. Failure to notice account policies.
5. Any kind of act or series of act in ordered to defraud the college.

Preliminary investigations

During the internal audit the internal auditee can initiate the preliminary investigations, if he find any suspect, misconduct to verify that trying to use irregularity that college has sustained any actual losses.

During the internal audit the internal auditor go through following steps,

Identify each account and set a policies and measure, if they feel could be used or affected by the defalcation. For further follow the internal audit, the auditor determines the each account;

Identify the type of transaction used to make entries or adjustments.

Identify the all those source of funds which involves in the fraudulent activities.

If the preliminary meeting shows that there are no evidence in order to track the substance, the investigate can be terminated, and appropriate member of the LCB has notified about the facts and figure which finds during this investigation.