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Business Policy and Procedure Manual
University of Missouri-Columbia
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March 2004
Chapter 1
GENERAL AND ADMINISTRATIVE INFORMATION
Section: 1:030
Internal Auditing

Internal Auditing

The internal auditing function performs a broad program of analyses involving operational and financial audits. Its function is to assist management in the effective discharge of responsibilities by furnishing objective analyses, appraisals, recommendations, and pertinent comments concerning the activities reviewed. Internal auditing has unrestricted access to all University operations, records, property and personnel.

Oversight of Internal Audit

The system-wide internal audit steering committee establishes policies and procedures for the internal audit function. Division of Finance-Accounting oversees and coordinates internal audits for the MU campus and serves as liaison to the steering committee and the internal auditors.

Program Objectives

  • Evaluate whether University organizations and functional units are effectively carrying out their responsibilities of planning, accounting, custody, and control, in accordance with management directives and high standards of administrative practice.
  • Report to appropriate management levels on the results of each review, the opinions formed, and the recommendations made.
  • Evaluate plans and actions taken to correct the reported conditions to insure satisfactory disposition of audit findings; and, if the disposition is considered unsatisfactory, see that further discussions are held.

Program Activities

  • Review and appraise the soundness, adequacy and application of accounting, financial, and operating controls.
  • Review the reliability and integrity of financial and operating information and the means used to identify measure, classify, and report such information.
  • Review the systems established to insure compliance with those administrative directives and appropriate laws and regulations which could have a significant impact on operations and reports, and which should determine whether the organization is in compliance.
  • Review the means of safeguarding assets and, as appropriate, verifying the existence of such assets.
  • Appraise the economy and efficiency with which resources are used.
  • Review operations and programs to determine whether results are consistent with established goals and objectives; operations and programs are being carried out as planned; and, benefits are being received.

Program Process

Internal audits follow a structured process which includes the following:

  • A three-year audit plan that is updated annually.
  • A scope memo for each audit that describes the subject and purpose of the audit.
  • An entrance conference to discuss the audit with management of the area to be audited.
  • An exit conference with management of the area audited to discuss preliminary audit recommendations.
  • A draft copy of the audit report.
  • A response to the draft audit recommendations. While management of the area audited prepares the preliminary response, the Division of Finance-Accounting is responsible for the final response.
  • A final copy of the audit report with audit recommendations and management responses.
  • A six-month follow-up status report on implementing action agreed to in management responses.

Division of Finance-Accounting coordinates these activities for the MU campus.