Suggested Terms Of Reference For Internal Audit

Append below are the recommendations from CIMA’s guideline re: A Framework For Internal Controls pertaining to the suggested terms of reference for an Internal Audit. Hopefully, below might be useful for those self-starters who wish to initiate terms of reference for their internal auditing role:

Internal Audit’s Terms Of Reference


1.      Internal Audit is an independent review function established by management to review the internal control system as a service to the organization.


2.      Internal Audit is independent of the activities which it reviews to ensure it provides the unbiased judgements essential to its proper conduct and impartial advice to management.


3.Internal Audit has unrestricted access to all activities undertaken by the organization in order to review, appraise and report on:-

         ·   the adequacy and effectiveness of the systems of financial and managerial control and their operation in practice;

  • the extent of compliance with, relevance of, and financial effect of, established policies, plans and procedures;
  • the extent to which the assets and interests are accounted for and safeguarded from losses of all kinds arising from waste, extravagance, inefficient administration, poor value for money, fraud and other causes;

        ·    the suitability, reliability and integrity of financial and other management information and the means used to identify, measure, classify and report such information;

  • the integrity of computer systems, including systems under development, to ensure that controls over computer processing and associated clerical procedures offer adequate protection against error, fraud and loss of all kinds;


  • the suitability of the organization of the units internally audited for carrying out their functions;
  • the follow up actions taken to remedy weaknesses identified by Internal Audit review.

Refer to MORE ARTICLES on Internal Audits 

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.