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.