Internal Audit 15062016

DIPLOMA COURSE
IN
INTERNAL AUDIT
Course Objective:
Internal Audit is an assurance and consulting service that reviews the efficiency and
effectiveness of the internal control. . It assists management at all levels in achieving
objectives of the organization. It acts as ‘eyes and ears’ and ‘go-to man’ of the board of
directors.
In the Companies Act 2013 the role of the internal Auditor is well acknowledged. The
Act mandates the appointment of Internal Auditor. The internal auditor shall be either a
Charted Accountant or Cost Accountant or any other person to be appointed by the
Board and Audit committee of the organization. According to the Rules framed under
the Companies Act 2013 the following class of companies comes under mandatory
Internal Audit.
Every listed company
Every public company having paid-up share capital of 50crore INR or more
Every public company having turnover of 200 crore INR or more
Every other public company which has any outstanding loans or borrowings
from banks or public financial institutions of100crore INR or more or which has
outstanding deposits of more 25 crore INR or more at any point of time during
the last financial year
Every private limited company having turnover of 200 crore INR or more
Every private limited company which has any outstanding loans or borrowings
from banks or public financial institutions of100 crore INR or more

Eligibility Criteria:
Only members of the Institute are eligible for registration for the programme
Pedagogy:
A mix of Web Based, self-study and contact sessions. A total of 240 hours of learning
comprising 45 webinar sessions of 1-2 hours duration, 140 hrs of Self-Study, 30 hrs of
Contact classes at Hyderabad Centre of Excellence, Hyderabad. Attendance in contact
classes is optional. A candidate opting for contact sessions shall bear the cost for
attending those. The Institute will not pay any TA and DA for attending the contact
sessions.
As part of the Program, Completion of a detailed project report/ case study write-up is
mandatory for the completion of the course. The detailed guidelines and framework for
writing the case study and preparing the project will be issued to the participants in due
course. Plagiarism of any kind will be punished severely.
Faculty:
Faculty will be drawn from academicians associated with top academic Institutes,
practitioners engaged in Auditing and others, including Government officials and
Regulators
Learning Outcomes:
On successful completion of the course, participants will gain knowledge on the theory
and practice of Internal Audit. In particular, participants shall:
1. Develop proficiency in Internal Audit of different sectors
2. Building up Internal Audit as one of the core competence area of Cost and
Management Accountants.
Course Duration:
Course will be of one-year duration and will involve investment of 240hours of

learning. In addition, a participant is expected to invest around 50 hours in completing
a Internal Audit project in the last leg of the course concurrently.
Course Fee:INR Twenty Thousand (Rs. 20,000/-) only
The course fee excludes the examination fee and the cost for attending personal contact
classes, to be organized at Hyderabad.
Evaluation Mechanism:
Participants will be evaluated through written examination.
Examination will be conducted by the Examination Department of the Institute

once/twice a year along with other examinations.
Examination fee is Rs. 1,200 per attempt. A student may appear in all the papers in one
attempt or may appear in a single paper in one attempt.
The participants will be evaluated for each module of the course. The participants who
will score 50 percent or more in the examination for each module and will obtain B or
higher grade in the project will be awarded the Diploma in Internal Audit by the
Institute. Grades will be awarded on project work and will not be included in
calculating aggregate marks.
Course Contents:
Each paper will carry 100 marks.
Paper-I Nature of Internal Audit:

I. Nature of Internal Audit: Definition of Internal Auditing, Evolution of Internal
Audit, Need of Internal Audit, Code of Ethics. The Ethical climate, Investigate
and recommend resolution for ethics/compliance complaints, Determine
disposition of ethics violations, Foster healthy ethical climate, Maintain and
administer business conduct policy, Define Report on compliance, Strategic and
operational roles of Internal Auditor. Difference between Systems audit and Risk
Based Internal Audit, Internal Auditor Vs Statutory Auditor, Internal Auditor Vs
Cost Auditor.
II. Internal Controls: Internal Control Framework, Internal Control techniques,

designing the control process and Managerial controls, Control process
Hierarchy, Communication Structures in Support of the Control process- Impact
of Information Technology on Control Systems, Alternative control frame works.
Role of Internal Auditors in implementing internal controls in the organization.
COSO Internal Control - Integrated Frame work
III. Corporate Governance: Importance of Corporate Governance, Corporate
Governance principles, Different Systems of Corporate Governance, Role of
Internal Auditor in Corporate Governance.
IV. Risk Management: Risk vocabulary and concepts, Process of identifying

different risks in the organization, Financial Risk Management, Risk Financing,
Economics of the Risk Financing. Risk Management Techniques, Risk /control
implications of different organizational structures, Risk/control implications of
different leadership styles. Financial Position of the organization. External factors
affecting Risk Financing, COSO Risk Management Frame work. Role of the
Internal Auditor in Risk management.
V. Understand the internal Audit Activity’s Role in organizational Governance:

Role of internal auditor in obtaining board approval of audit charter,
Organizational Structure of Internal Audit. Report significant audit issues,
Communicate key performance indicators to board on a regular basis, Discuss
areas of significant risk, and Support board in enterprise-wide risk assessment.
Paper-II: Internal Audit Practice
I. Planning and Process of the Internal Audit: Initiate Preliminary communication

with engagement client, Conduct a preliminary survey of the area of the
engagement. Establishing/ refine engagement objectives and identify/ finalize the
scope of engagement. Internal audit planning process. Long term planning vs
Short term planning, Internal Audit Engagement planning- planning for staffing
and other resources requirements, establishing adequate planning and
supervision of the engagement, Preparing the Audit work program
II. Data Collection and Analysis: Sources of collection of data, evaluate the
relevance, sufficiency and competence of evidence, Analyze and interpret data,
Develop working papers, Review of working papers, communicate the interim
progress, Draw conclusions
III. Tools and techniques for conducting the Audit Engagement: Sampling –
Nonstatistical, Statistical, Statistical Analysis. Data gathering tools-Interviewing,
questionnaires, checklists. Analytical review techniques- Ratio estimation,
variance analysis,
IV. Frauds and their management: Determining the need for Fraud Investigation,
Common types of Fraud, Fraud risks per engagement Area. Fraud Investigation-
Determine parties to be involved with investigation. Establishing facts and extent
of fraud. Interrogation/ Investigation Techniques. Uses of computers in
analyzing data. Report out comes to appropriate parties. Process review to
improve controls to prevent fraud and recommend changes. Forensic Audit
V. Other Types of Audits: Internal Audit of banks- Stock and receivables audit,
Concurrent audit. Social Audit, Human Resources Audit, Environment Audit,
Cost Audit
VI. Internal Audit and Information Technology: Control frameworks Data and
network communication/connections-LAN, VAN and WAN. Electronic Fund
transfer, e-commerce, Information protection-Virus, Privacy etc. Operating
systems, ERP software, hacking.
VII. Internal Auditing Standards
Paper-III: Internal Audit Report preparation
I. Skills for Internal Audit Report Preparation
Technical skills
Soft Skills
Information technology skills
II. Internal Audit Report Preparation
Purpose and objective of Internal Audit Reporting

Internal Audit report standards
III. Presentation of Internal Audit Report.
Contents of the internal audit report

Presentation of the internal audit report
Monitoring recommendation
IV Practices and techniques followed in public sectors and not for-profit

organizations
V. Case Study / Project
Project
Every student will be required to complete a project on Internal Audit before or
after passing written examinations. The candidate will register his/her project with the
Institute and shall commence working on the same after receiving approval from the
Directorate (Advanced Studies). He/she will submit the project report within six
months from the date of the issuance of the approval by the Directorate (Advanced
Studies).
Note: Awarding of the CEP Credit Hours to the members of the Institute is under active
Consideration.
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DIPLOMA COURSE

Every listed company

Every public company having turnover of 200 crore INR or more

the last financial year

from banks or public financial institutions of100 crore INR or more

practitioners engaged in Auditing and others, including Government officials and

and practice of Internal Audit. In particular, participants shall:

1. Develop proficiency in Internal Audit of different sectors

Course will be of one-year duration and will involve investment of 240hours of

Course Fee:INR Twenty Thousand (Rs. 20,000/-) only

Participants will be evaluated through written examination.

Examination will be conducted by the Examination Department of the Institute

calculating aggregate marks.

Each paper will carry 100 marks.

Paper-I Nature of Internal Audit:

II. Internal Controls: Internal Control Framework, Internal Control techniques,

IV. Risk Management: Risk vocabulary and concepts, Process of identifying

V. Understand the internal Audit Activity’s Role in organizational Governance:

Paper-II: Internal Audit Practice

I. Planning and Process of the Internal Audit: Initiate Preliminary communication

VII. Internal Auditing Standards

Paper-III: Internal Audit Report preparation

I. Skills for Internal Audit Report Preparation

II. Internal Audit Report Preparation

Purpose and objective of Internal Audit Reporting

III. Presentation of Internal Audit Report.

Contents of the internal audit report

IV Practices and techniques followed in public sectors and not for-profit

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