INTERNAL AUDIT: A TOOL FOR MANAGEMENT CONTROL

CHAPTER ONE

1.0            INTRODUCTION:

Internal audit is a large and significant part of management control of both large and small organization.  The role of internal auditor has evolved from concentration of the detection and prevention of errors and fraud in the present day emphasis to reviewing system of internal control.

The Chartered Institute of Public Finance and Accountancy, define internal audit as an independent appraisal activity within an organization for the review of operation as a service to management.  It is a management control which functions by measuring and evaluating the effectiveness of other controls.

The problems which always exist between the managers/director to the owner of business, were solved by appointing an independent person called “auditor” to investigate the report on findings.

Internal auditor is concerned with the implementation of social responsibility policies adopted by top management.

Internal audit that is established to provide a continuous and complete audit of the accounts and records of the company with use of the following:

(i)                internal procedures system

(ii)             internal check

(iii)           pre-audit jobs

These would help in the managerial control of the organization.

The overall purpose of internal auditing is to assist management in achieving the most effective administration of operation of the business.

1.1     PURPOSE OF THE STUDY:

The purpose of this research work are as follows:

(i)                to evaluate the determinant for effective tools in management control.

(ii)             To assess the effects of internal auditing on internal control system of an organization.

(iii)           To investigate the type of responsibilities internal audit has with the chief executive of the organization under which he operates.