RUDIMENTS OF INTERNAL AUDIT


Director, Internal Audit, Mrs. Taiwo Aroyeun

In a bid to ensure better financial management and prudence in the University, the Directorate of Internal Audit is stepping up campaign to enlighten members of the community on the rudiments of internal auditing.
The Director of Internal Audit, Mrs. Taiwo Aroyeun, said the Directorate will periodically, through the UNAAB BULLETIN, educate the community on basic issues and bits they need to know about the processes required for a judicious public finance practices.
Enjoy this edition’s recipe:
What is Auditing?
An independent examination of financial books and accounts of an organization by a duly appointed person, for the purpose of determining, whether ‘true and fair’ financial procedures, with relevant statutory guidelines, were adhered to.
True:  the financial statement is a true summary of the books of accounts and records of the company, department or the organization.
Fair:  the interest of all the stakeholders were taken into consideration in forming an opinion.
Objectives of an Audit   
•    Primary objective
– To examine and express an opinion on set of accounts of an        organization
•    Secondary objective
–    Prevention of fraud or error
–    Detection of fraud or error
–    Internal control reporting
–    Management advice.

Definition and Objectives of Internal Audit
Internal Auditing has been designed as an independent appraisal activity within the University System, for the review of Accounting, Financial and other operations as a basis for protective and constructive service to Management.  It is a Management control system which functions by measuring and evaluating the effectiveness of other controls.
The overall objective of Internal Auditing therefore, is to assist Management to discharge its responsibilities properly in enhancing effective and efficient utilization of Government funds.  Nevertheless, the Internal Audit is to ensure that the University achieves its set objectives at a minimum cost and in accordance with laid down rules and regulation of Council/Management, standard practice and the laws of the Federal Republic of Nigeria.

Internal Audit Functions
•    Maintenance of adequate check against fraud and misappropriation;
•    Verification of assets and liabilities at regular intervals;
•    Examination and constant scrutiny of all system of authorisation of payments to ensure adequate control of expenditure;
•    Ensuring that various policies put in place by the Management were strictly adhered to;
•    Periodic examination of internal checks to ensure the highest possible standards of accuracy and efficiency;
•    Review of accounting systems and related internal controls;
•    Examination of financial and operating information for Management, including detailed testing of transactions and balances;
•    Review of the implementation of corporate policies, plans and procedures;
•    Collaboration with the statutory auditor on all matters affecting statutory audit;
•    Special investigations.

Audit Queries
Before any voucher is passed, many things are looked for to ensure compliance with the University laid down rules and in line with best audit practice.
These include (but not limited to):
•    The purpose for the expenditure;
•    The justification for the expenditure;
•    Due and proper authorisation;
•    Is it in line with the University policies?
•    Is the voucher or claim backed with relevant documents?
•    Is the price reasonable when compared with prevailing market price?
However where the auditor is of the opinion that any of the aforementioned is missing or additional information is required to adequately form an opinion, an audit query would be issued.

Areas of Audit Operations from which Queries are Usually Raised
•    Expenditure control
•    Salaries
•    Pension and gratuities
•    Internal Generated Revenue (IGR), and
•    Grants.

Leave a Reply