Doctor (PhD) Tovma Nataliya

Kazak National University named al-Farabi

Standards of Internal Audit

Abstract. Internal audit is an independent management function, which involves a continuous and critical appraisal of the functioning of an entity with a view to suggest improvements thereto and add value to and strengthen the overall governance mechanism of the entity, including the entity’s strategic risk management and internal control system.

Key words internal audit, reporting, development, intra firm standards.

Introduction. The internal audit charter is a formal document that defines the internal audit activity’s purpose, authority, and responsibility. The internal audit charter establishes the internal audit activity’s position within the organization, including the nature of the chief audit executive’s functional reporting relationship with the board; access to records, personnel, and physical properties relevant to the performance of engagements; and defines the scope of internal audit activities. Final approval of the internal audit charter resides with the board.

The internal audit function contributes to the improvement of the institution's operations by providing objective and relevant assurance regarding risk management, control and governance processes to management and the Board. Management is responsible for evaluating the institution's risks and establishing and maintaining adequate controls and processes. To provide relevant information, the internal audit activity will consider the goals of the institution, management's risk assessments and other input from management in determining its risk-based audit activities. This policy addresses staffing, responsibilities of the internal audit function, audit planning and reporting on internal audit activities. In addition to this policy, the Office of System-wide Internal Audit maintains an audit manual. The purpose of the audit manual is to provide for consistency, continuity, and standards of acceptable performance.

The high scientific and practical demand of in-depth study of problems of intra firm standardization of auditor activity predetermined a choice of a subject of research [1, page 56].

Reviewing the literature. Problems of development of intra firm standards, their essence and classification are investigated by domestic scientists: A.M. Bogomolov, A.M. Kovalyova, N.T. Labyntsevym, L.G .Makarova, C.B. Pankova, V.I. Podolskim, E.A. Sirotenko, L.V. Sotnikova, S. P. Suvorova.

Stating the purpose. The purpose of work consists in theoretical justification of intra firm standardization and development of a complex of practical recommendations about development of intra firm standards. For achievement of a goal in the thesis the following tasks are set:

- to investigate essence and the main directions of development of standardization of auditor activity;

- to develop recommendations about modeling of system of intra firm standards of auditor activity and to offer model of hierarchical system of intra firm standards in audit organizations on the basis of synthesis of approaches to their classification;

- to specify methodical approaches to formation of intra firm standards by means of development and justification of their standard structure;

- to prove the main directions of standardization of services accompanying audit taking into account features of the standard and legal base regulating process of rendering services accompanying audit;

- to develop the intra firm standard used at carrying out survey check;

- to offer methodical approach to development of the standard, regulating carrying out compilation of the reporting in the form of transformation forms of accounting reports in reporting forms on IFRS.

Results of research

1. To define a role and value of intra firm standards of auditor activity. The standard – official state or normative technical documentation of branch, the enterprise, the form, establishing necessary qualitative characteristics, requirements with which has to satisfy this type of production of goods.

The system of standards in the generalized look includes the international standards; national standards; intra firm standards. Finally the goal of system of standards is reached by formation and application of a package of intra firm standards which detail and regulate uniform requirements to performance of audit inspections and registration of audit reports. Value of system of standards consists that it:

• provides high quality of an audit inspection;

• promote introduction in auditor practice of new scientific achievements;

• helps users to understand process of an audit inspection;

• provides communication of separate elements of auditor process;

• creates public image of a profession.

2. Modeling of intra firm standards has to be carried out on the basis of the accounting of specifics of objects of standardization and the approach used at development of the concrete standard. Development of the concrete standard includes: choice of object of standardization, modeling of process of rendering services taking into account features of object of standardization, model optimization, model standardization. When forming a package of intra firm standards it is necessary: to observe requirements of the international standards of audit.

Methodical recommendations about formation of a complex of intra firm standards in audit organizations on the four-level hierarchical system including are developed:

1) the conceptual standards directed on behavior of auditors and general provisions of audit;

2) the standards regulating responsibility of auditors and their level of competence;

3) the standards regulating carrying out check in a section of its main stages and rendering services other and accompanying audit;

4) the applied standards regulating carrying out an audit inspection in relation to objects of the account, to branches and groups of managing subjects; development of a complex of standards provides systemacity when forming a package of intra firm standards taking into account specifics of auditor services rendered by it.

3. The system of intra firm standards includes standards of different types. Scientists and practicians allocate the groups of standards differing with extent of specification of those questions which they regulate. Methodical approaches to formation of applied standards by means of development of structure of the intra firm standard of the audit regulating carrying out an audit inspection in relation to concrete object of the account and created on the basis of accounting approach are specified.

Figure 1 – Classification of intra firm standards

. In this regard, there are three levels of the marketing audit:

Table 1 - Levels of marketing audit

Level 1 3	Level 2	Level 3
Bank as a whole - control of marketing at the bank as a whole is aimed at obtaining the information necessary to assess the level efciency of marketing	Marketing department - at the level of Marketing marketing control should be carried out on a continuous basis.	External control - external control is carried out, as a rule, advisory firm.

The information obtained in the process of marketing audit can reflect and to document the bank's policy in respect of certain areas of marketing activities in the future a more optimal allocation of resources for a particular purpose.

The methods of the audit may include the following:

Figure 4 - Methods of conducting audits at the bank

The system of payment and incentives do not take into account the activities of employees of adjacent units marketing purposes. The lack of communication between departments on the basis of competent document management across the bank. Inefficient allocation of management authority, unwillingness of owners or senior management of the bank to clearly define the responsibilities and rights of employees, and on this basis to delegate the appropriate authority.

References

1. Savin, O.P.Issledovaniye of a condition of standardization auditor P. Savin's activity / Island//Account and statistics. - 2011.— square No. 2(18).-0,9.

2. Soboleva N. G. Intra firm standards as condition of improvement of quality of audit. St. Petersburg 2008 - 30 pages.