Financial Services
Policies and Procedures - Internal Audit
Policy 1 - Functional Responsibilities
General
The Office of the Internal Auditor is an independent appraisal function within
the University. It serves as a management tool for the review of individual
University operations and evaluates internal controls, primarily those of
a financial nature. Internal audit examinations furnish University administrators
with information necessary to monitor the operational systems for which they
are responsible. Other responsibilities are:
- Assisting University administrators in the performance of their duties by furnishing them with analyses, recommendations, and other information regarding individual University operations.
- Conducting financial and compliance audits and participating in the planning and development of new systems. Financial audits emphasize the determination of the reliability and accuracy of financial data and an evaluation of the internal controls relative to that data. Compliance audits observe adherence to University policies and procedures, statutory regulations, accepted business practices, etc. The planning and development of new systems includes determination of the controls necessary to ensure adequate and effective results.
Authority
The Chancellor is responsible for providing administrative direction to
the Office of the Internal Auditor. Audit reports are addressed directly
to the
Chancellor. The Audit Committee of the University’s Board of Trustees
serves in an advisory capacity to guide the direction of administrative actions.
The Office of the Internal Auditor maintains an informational relationship
with the Office of Business Affairs on the basis of the value such frequent
communications affords the University. These reporting relationships are
designed to elevate independence and proper consideration of audit findings
and recommendations.
To the extent permitted by law, the Office of the Internal Auditor is authorized
to fully and freely access all University records, properties, and personnel
relevant to an audit. The office strives to protect the confidentiality of
information reviewed, and if possible, accommodate operating schedules of
areas reviewed.
Independence and objectivity are important to the proper functioning of the
Office of the Internal Auditor. These qualities cannot be maintained if auditors
participate directly in operations. Recommendations included in audit reports
are offered as constructive improvements, but implementation is the responsibility
of the managers of those activities reported upon.
Professional Standards
The duties and responsibilities of the Office of the Internal Auditor are
accomplished within the framework of standards of professional conduct established
by organizations
in both the public and private sectors. Those organizations providing guidance
include the American Institute of Certified Public Accountants, the Institute
of Internal Auditors, and the United States General Accounting Office. The
Office of the Internal Auditor is a member of the Association of College
and University Auditors. ACUA adds to its members’ professional body of knowledge
through annual conferences, newsletters, seminars, and research projects. Membership
in the North Carolina University Auditors’ Association provides a more
localized source of professional knowledge. Most importantly, these memberships
provide a forum for interaction among the various college and university
auditors.
The professional standards are rooted in the concept that auditors are independent
of the activities they audit. This independence is achieved through organizational
status and objectivity. The Office of the Internal Auditor is responsible
to a level of management whose authority is considered sufficient to assure
both
a broad range of audit coverage and effective action on the audit findings
and recommendations. Objectivity requires that the Office of the Internal
Auditor not perform such tasks as designing, installing, and operating systems
which
it may be called upon to review. However, objectivity need not be adversely
affected by determining and recommending control standards during the development
process of systems and procedures.
Audit Planning and Scheduling
The Office of the Internal Auditor will, based upon reasonable requests,
schedule audit work in a manner convenient to the management of the department
to be
audited. During the period that internal auditors are working in the offices
of the activity under review, the auditors will minimize their demand on
the time of the personnel, so that normal responsibilities can be accomplished.