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Process and methods of performing internal audit

Internal audit plays a vital role in driving the growth and success of businesses worldwide. However, the internal audit function in Vietnam is still in the developmental stage, facing challenges due to a lack of synchronization within management systems. To overcome these obstacles and ensure effective internal audit practices, businesses can greatly benefit from the expertise of a risk management consultant. In this article, presented by RSM, we will explore the process and methods of performing internal audits, emphasizing the significance of risk management in supporting this critical function.


Main content:

  1. Regulations and internal audit process

  2. Method of performing internal audit

  3. Importance of internal audit in enterprise risk management

  4. Internal audit service of RSM Vietnam

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1. Regulations and internal audit process


Article 12 of Decree No. 05/2019/ND-CP clearly stipulates the internal audit regulations and processes as follows:

  • Internal audit regulations, including objectives, scope of activities, positions, tasks, powers, and responsibilities of the internal audit department in the unit and relationship with other departments; including requirements for independence, objectivity, fundamental principles, professional qualifications, quality assurance of internal audit and other relevant matters.

  • Internal audit process: detailed regulations and instructions on risk assessment methods, annual internal audit plan, each audit plan, how to perform audit work, send audit reports, monitor and supervise post-audit corrections, monitor the implementation of post-audit recommendations, and keep records and internal audit documents.

  • On the basis of the provisions of this Decree, the unit must develop internal audit regulations and procedures suitable to the characteristics of its operations. The entity is encouraged to apply international practices on an internal audit if there is no conflict with the provisions of this Decree and other legal documents.

The authority to issue the Internal Audit Regulations is:

  • Ministers, heads of ministerial-level agencies, heads of government-attached agencies, for ministries, ministerial-level agencies, and agencies attached to the Government;

  • Presidents of People's Committees of provinces and centrally run cities, for People's Committees of provinces and centrally run cities;

  • Heads of public non-business units, for public non-business units;

  • Board of Directors for listed companies;

  • The Board of Directors, for enterprises in which the State owns more than 50% of the charter capital, is the parent company operating under the model of the parent company - subsidiary company;

  • The Board of Members, the company's president, for state-owned enterprises that are parent companies, operate under the model of parent company - subsidiary company.

2. Method of performing internal audit

Article 13 of Decree No. 05/2019/ND-CP clearly stipulates the internal audit method as follows:

  • The method of performing an internal audit is a "risk-oriented" audit method, with priority given to focusing resources on audit units, divisions, and processes that are assessed as having a high level of risk.

  • The internal audit plan must be developed based on the results of the risk assessment and must be updated, changed, and adjusted in accordance with developments and changes in the operation of the entity and changes in the Company's operations. accompanying risks.

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3. Importance of Internal Audit in Enterprise Risk Management

Internal audit contributes significantly to enterprise risk management by:

  1. Ensuring Compliance: Internal audit helps ensure compliance with laws, regulations, and internal policies, reducing the risk of legal and regulatory penalties.

  2. Risk Detection and Prevention: Through in-depth analysis and monitoring of operational processes, internal auditors identify potential errors and risks, allowing businesses to take timely corrective actions and prevent fraud cases.

  3. Upgrade of Management Systems: By providing valuable insights and recommendations, internal audit helps enhance the effectiveness of management systems, improving overall operational efficiency.


4. Internal Audit Services at RSM Vietnam

At RSM Vietnam, we offer comprehensive internal audit consulting services that include the following steps:

  1. Building an Internal Audit Department: We work closely with the company's Board of Directors to establish a dedicated internal audit department. This involves identifying stakeholder expectations, developing department structures and operating regulations, understanding the company's risk level, and formulating an internal audit strategy.

  2. Resource Identification and Development: We assist in identifying the necessary skills within the internal audit department and provide tailored training programs to meet those requirements. Our training content ranges from general to in-depth sessions, ensuring personnel in the department are equipped with the necessary knowledge and skills.

  3. Internal Audit Procedures and Performance Evaluation: We develop internal audit procedures that align with industry best practices and the organization's specific needs. Additionally, we help establish performance evaluation and control tools to assess the effectiveness of the internal audit function and drive continuous improvement.

Our services

  • Performing internal audit services

  • On-demand operational review/outsourced service

  • Reviewing the quality of internal audit activities

  • Assessment of compliance with corporate governance regulations

  • Internal Control System Review

  • Provide risk management services

>>> See more Risk management consulting services


RELATED ARTICLES:

  • Improve the quality of internal audit activities through a risk-based approach

  • Why is risk management consulting important for businesses?

  • Consulting on corporate governance and risk management: JIT (Just In Time) system.

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