THE role of auditors has in recent months come under scrutiny given the number of company closures reportedly due to fraudulent activities.
Report by Mernat Mafirakurewa
This has brought to the fore the role played by internal auditors in organisations. NewsDay Acting Business Editor Mernat Mafirakurewa, (ND) spoke to the Institute of Internal Auditors Zimbabwe (IIAZ) president Tapiwa Mapukute (TM) on the role of his organisation, among other issues.
Below are excerpts:
ND. Could you give us a brief background of your organisation? TM: The Institute of Internal Auditors Zimbabwe is an affiliate of the Global Institute of Internal Auditors (IIA Global), which was established in 1941.
IIA Global is the leading non-profit professional body representing interests of internal auditors worldwide and is the internationally recognised authority, principal educator and acknowledged leader in certification, research and technological guidance for the profession. IIAZ was formed in 1988, and it is the only recognised professional body in Zimbabwe and has a membership of over 500 professionals.
ND: What is the role of internal auditors? TM: According to the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing, internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations.
It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Internal auditors therefore assist organisations by identifying and evaluating significant exposures to risk and contributing to the improvement of risk management, governance and control systems.
ND: How critical are auditors in the success or failure of an organisation? TM: Internal auditors provide the board and senior management with global assurance based on the highest level of independence and objectivity within the organisation.
Through a risk-based approach, internal audit provides assurance on the effectiveness of governance, risk management and internal controls, including the manner in which the board and operational management achieve risk management and control objectives. Without internal auditing, organisations would be besieged by fraud, theft, waste and inefficiencies that make them less competitive.
ND: We have in recent times witnessed the closure of several institutions as a result of failure of internal controls. To what extent can auditors ensure good corporate governance in organisations? TM: Internal auditors are capable of ensuring good corporate governance in organisations where the following conditions exist:-
- The independence of the audit function within an organisation is respected and promoted to enable internal auditors to execute their function without interference or undue influence
- The status of the audit function within the organisation is sufficient and distinct to enable internal auditors to accomplish their objectives.
The position of the chief audit executive should be equivalent to the status of other key functional heads to enable him to deal effectively with his peers when discharging his duties and responsibilities
- Internal auditors report to the Audit Committee of the Board, and have direct access to the board and the board chairperson, in order to ensure that audit recommendations are given due attention by executive management
- Internal auditors have unrestricted access to the organisation’s records, assets, personnel and premises to ensure complete coverage of their assurance services on all of the organisation’s business activities
- The internal audit function is allocated sufficient resources to enable it to exercise its assignments on its own initiative in all the departments of the organisation
- The board and the audit committee compel internal auditors to comply with the International Professional Practices Framework (IPPF) issued by the IIA, which contains the mandatory International standards and the code of ethics; and strongly recommended guidance in the form of position papers, practice advisories and practice guides.
Where these conditions exist for internal auditors in any organisation and where internal auditors comply with the IPPF, internal auditors will prove to be invaluable and indispensable professionals in endeavours to achieve and guarantee good corporate governance.
ND: How immune are internal auditors to corruption? TM: All internal auditors that are our members are compelled to abide by the IIA’s code of ethics, and they know that unethical conduct will be punished by the IIA in terms of our disciplinary procedures contained in our bylaws.
However, this will not guarantee that there will be no corrupt internal auditors, but the IIA can guarantee to investigate and punish corrupt internal auditors where cases are brought before us for our attention.
ND: What measures have been put in place to guard against this scourge? TM: Where internal auditors are found wanting in terms of their ethical and professional conduct, the IIA will sanction the internal auditors in terms of its disciplinary procedures, which sanctions range from “censure” or “suspension” to “expulsion and/or revocation of IIA professional designations” for the most severe violations of the code of ethics.
