Fraud risk as internal audit fails

Fraud risk as internal audit fails

Corporates could be facing a higher risk of fraud because internal audit is failing to provide the reassurance on risk management that companies need

A survey of largely FTSE100 audit committee chairmen by
PricewaterhouseCoopers has found that, in many cases, not enough reliance is
being placed on internal audit to help them effectively carry out their role.

Many of the respondents questioned the skills and status that their internal
audit functions possess to enable them to play a full role in the risk
assessment process, with large numbers relying more on the track record of
executive management or their external auditors for assurance.

Some questioned the independence of the function, as it often reports to the
finance director.

‘Internal audit should act as the eyes and ears or in many cases the
conscience of the business,’ said Jennifer Matheson, director for PwC’s internal
audit services. ‘This is not yet happening to the extent that it should.’

She added that, if not addressed, there was potential for greater exposure to
risk, but audit committees had probably prioritised their time effectively so
far.

The survey also found that many were unaware of new Turnbull requirements for
the audit committee to objectively assess the performance of internal audit
annually, and to have an external evaluation every five years.

Related Articles

FRC fines reach record high after 24% increase this year

Audit FRC fines reach record high after 24% increase this year

4d Alia Shoaib, Reporter
PwC replaces Deloitte as Linklaters auditor after Arsenal lawsuit

Audit PwC replaces Deloitte as Linklaters auditor after Arsenal lawsuit

6d Alia Shoaib, Reporter
New FRC Corporate Governance Code focuses on culture and diversity

Audit New FRC Corporate Governance Code focuses on culture and diversity

7d Lucy Skoulding, Reporter
PwC ordered to pay $625.3m over failure to detect Colonial Bank fraud

Audit PwC ordered to pay $625.3m over failure to detect Colonial Bank fraud

3w Alia Shoaib, Reporter
FRC to investigate KPMG’s Conviviality audit

Audit FRC to investigate KPMG’s Conviviality audit

3w Alia Shoaib, Reporter
June news roundup with Alia Shoaib

Audit June news roundup with Alia Shoaib

3w Alia Shoaib, Reporter
FRC opens investigation into Deloitte’s audits of SIG

Audit FRC opens investigation into Deloitte’s audits of SIG

4w Alia Shoaib, Reporter
PwC auditor spent just two hours on BHS audit, says chairman

Audit PwC auditor spent just two hours on BHS audit, says chairman

1m Alia Shoaib, Reporter