Internal Audit Analysis

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The evolution of internal auditing has been a very dynamic one. It has been affected by the increasing focus for its role in corporate governance, especially because of its links with internal control. Internal auditors had to extend their area of actions, becoming more involved in control and governance processes. In the light of these changes, new concept began to become the bull’s eye for an auditor which includes the added value by internal audit to organizations and its effectiveness. In order to determine the value added to the organization, efficiency and effectiveness of internal audit becomes more and more important. The main purpose of this paper is to review an internal audit for the purpose of internal control to add value to the…show more content…
In this part we employed gap analysis proposed by A. Parasuraman, Valarie A. Zeithaml, Leonard L. Berry (1985). The data obtained was plot into importance-performance graph to analyze the gap and recommend areas for improvement. Therefore using this approach we were able to measure the intangible performance of the audit process and therefore find its effectiveness in delivering value to the organization. Further we were able to categorize the factors affecting the effectiveness into two categories namely Focus of Audit and Value…show more content…
F3 - Timing of Audit/Audit Report iii. F4 - Improvement in Process of Departments iv. F6 - Clear and Logical Report While it was interesting to see that importance of factors baring F1, F7 and F8 lies below mean value i.e. respondents do not consider them important, the same parameters, selected by researchers, are considered as important in the process of Audit. However, factor analysis provided with insight by reducing the factors into two categories i.e. Focus of Audit and Value Adders. The factor F2 that forms the category of Value Adder is considered not important to the respondents. Rightly so, since Value Adders is more of a task related to department of human resource and higher management. Further, there was void recognized in the study which can be filled by giving more focus on factors F2, F3, F4 and F6. When we find the average of the importance-performance value for Factor 1 and 2 we get the value of 15.93254and 15.78287 respectively. Therefore it can be concluded here that the Audit process has worked effectively (although marginally) for factor 1 i.e. Focus of Audit. It is also important to note that variables “Value Added To Department”, “Timing of Audit/Audit Report”, “Improvement in Process of Departments”, “Clear and Logical Report” are the underperformers and management need to take note of them to make the process of audit more

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