The Importance Of Internal Audit

control function that acts as a third line of defense after the business and risk management function. The other control functions are – finance controller, legal and compliance, business continuity, and risk management. The primary responsibility of the control functions within organization is to provide oversight based on the guidance as stated by the company.

Internal audit is an independent control function that assesses the risk and control effectiveness of the firm.

The scope of the Internal Audit is firm wide and it reports to the audit committee. Annually, leveraging the ongoing risk assessments, it develops the audit plan wherein the business units within the firm are audited. The approach to internal audit is risk based. That is,

Figure 12 Sampling Rationale (Stratification) 37

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List of Tables Table 1 External Audit vs Internal Audit 14

Table 2 List of governing bodies for Audit 16

Table 3 Code of Ethics: Principles 19

Table 4 International Standards 20

Table 5 List of Standard Process and Risks 22

Table 6 Standard PRC 23

Table 7 Control Assessment steps for the standard controls 25

Table 8 Rating Test Issues 26

Table 9 Self Assessment Templates 30

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Abbreviations (“1 LoD”) first Line of Defense, 16

(“2 LoD”) second Line of Defense, 16

(“3 LoD”) third Line of Defense, 16

AICPA, 17

AICPA (American Institute of Certified Public Accountant), 17, 18

ERM (Enterprise Risk Management),

Generally Accepted Accounting Principles (GAAP),, 14

U.S. PCAOB, 17

U.S. SEC, 17

About BlackRock

BlackRock is an asset management firm, managing $4.72 trillion assets and is known as the world’s largest fiduciary investment manager.

It provides global market insights using market intelligence, superior investment solutions in terms of investment strategies and technology platforms and deep risk-management expertise, leveraging tool “Aladdin” which helps manage $17 trillion including $4.72 trillion of BlackRock client assets.

History

BlackRock was founded in the year 1988 under The Blackstone Group with eight people – Lawrence D Fink, Robert Kapito, Susan Wagner, Barbara Novick, Ben Golub, Hugh Frater, Ralph Schlosstein, and Keith Anderson. Its initial focus was on