ADMINISTRATIVE PROCEDURE MANUAL

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6Hx7-2.2 Internal Organizatin !e"te#$er 1%& 1''2
(UR(O!E
T)e "*r"+e , t)i+ +e-tin i+ t e+ta$li+) t)e "*r"+e& a*t)rit.& re+"n+i$ilit. an/ "r-e/*re+ ,r t)e
Internal A*/it De"art#ent.
0I!!ION
Internal A*/iting i+ an in/e"en/ent a""rai+al ,*n-tin e+ta$li+)e/ 1it)in an rganizatin t exa#ine an/
e2al*ate it+ a-ti2itie+ a+ a +er2i-e t t)e rganizatin. T)e $3e-ti2e , internal a*/iting i+ t a++i+t
#anage#ent an/ t)e 4ar/ in t)e e,,e-ti2e /i+-)arge , t)eir /*tie+. It i+ t)e 4ar/5+ re+"n+i$ilit. t +et
"li-ie+& an/ t)e a*/itr5+ rle t in/e"en/entl. an/ $3e-ti2el. anal.ze& re2ie1& an/ e2al*ate exi+ting
"r-e/*re+ an/ a-ti2itie+& t re"rt n -n/itin+& an/ t re-##en/ -)ange+ ,r -n+i/eratin. T t)i+
en/& internal a*/iting ,*rni+)e+ anal.+e+& a""rai+al+& re-##en/atin+& -*n+el& an/ in,r#atin -n-erning
t)e a-ti2itie+ re2ie1e/.
6HAR7E! AND RE!(ON!I4ILITIE! OF INTERNAL AUDIT8
1. De2el" an a*/it "lan t e2al*ate t)e in+tit*tin5+ ,inan-ial& "eratinal an/ ED( -ntrl+.
2. A++e++ t)e e-n#i-al an/ e,,i-ient *+e , re+*r-e+.
9. Deter#ine t)e le2el , -#"lian-e 1it) e+ta$li+)e/ la1+& r*le+& "li-ie+ an/ "r-e/*re+.
%. Re-##en/ a/"tin , /e+ira$le "li-ie+ r -)ange+ t exi+ting "li-ie+.
5. Fll1-*" n t)e a/e:*a-. , -rre-ti2e a-tin+.
6. 6n/*-t +"e-ial "r3e-t+ at t)e re:*e+t , t)e 4ar/.
7. In2e+tigate -a+e+ , #i+a""r"riatin& #i+-n/*-t& ,ra*/.
;. E+ta$li+) an/ #aintain "r,e++inal ra""rt 1it) external a*/itr+ an/ #anage#ent.
'. <ee" A*/it 6##ittee an/ 4ar/ ,*ll. in,r#e/ n a ti#el. $a+i+ , t)e a-ti2itie+ , t)e
Internal A*/iting De"art#ent.
10. Fll1 t)e !tan/ar/+ , t)e (r,e++inal (ra-ti-e , Internal A*/iting an/ 6/e , Et)i-+ a+
"r#*lgate/ $. t)e In+tit*te , Internal A*/itr+.
AUDIT (RO6EDURE!
1. T)e Internal A*/itr +)all )a2e *nre+tri-te/ a--e++ t all re-r/+& "er+nnel& an/ e:*i"#ent in
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6Hx7-2.2 Internal Organizatin !e"te#$er 1%& 1''2
-arr.ing *t t)e $3e-ti2e+ , an a*/it.
2. All 4ar/ #e#$er+ )a2e *nre+tri-te/ a--e++ t t)e Internal A*/itr. T)e Internal A*/itr )a+
*nre+tri-te/ a--e++ t all 4ar/ #e#$er+. T)i+ "r#te+ in/e"en/en-e. =!ee A(0 01-0109
,r "r-e/*re+ -n-erning t)e A*/it 6##ittee , t)e 4ar/.>
9. T)e Internal A*/itr +)all /e2el" an a*/it "lan ,r re2ie1 an/ a""r2al $. t)e A*/it
-##ittee. T)e a*/it "lan +)all $e a""r2e/ ann*all.. T)e a*/it "lan i+ $a+e/ n a*/it ri+?
area+ i/enti,ie/ $. 4ar/ #e#$er+& t" #anage#ent& external a*/it re+*lt+& an/ internal
a*/itr ex"erien-e. T)e Internal A*/itr 1ill /e2el" a*/it $3e-ti2e+ an/ +-"e+ ,r ea-)
a*/it n t)e a""r2e/ a*/it "lan ,r t)e "re+i/ent5+ re2ie1 an/ t)e A*/it 6##ittee5+ re2ie1
an/ a""r2al. T)e a*/it "lan i+ +*,,i-ientl. ,lexi$le t -2er *nanti-i"ate/ /e#an/+ n t)e
Internal A*/itr gi2en t)e -)anging -llege en2irn#ent& e.g.& *nanti-i"ate/ internal a*/it
area+ #a. +*r,a-e /*e t external a*/it re+*lt+& r e2i/en-e , ,ra*/ #a. +*r,a-e t)at re:*ire+
i##e/iate Internal A*/itr attentin. T)e A*/it 6##ittee +)all re2ie1 an/ a""r2e a
-)ange in t)e a*/it "lan.
%. T)e Internal A*/itr +)all nti,. t)e /e"art#ent $eing a*/ite/ , t)e $3e-ti2e an/ +-"e ,
t)e a*/it an/ t)e ti#eta$le ,r -#"letin , t)e a*/it.
5. T)e Internal A*/itr +)all "er,r# a*/it+ in a--r/an-e 1it) generall. a--e"te/ a*/iting
+tan/ar/+.
6. T)e Internal A*/itr #a. "er,r# /i,,erent t."e+ , a*/it+8
a. F*ll A*/it - Nr#all.& ,*ll a*/it+ are re:*ire/ 1)en an area )a+ ne2er $een a*/ite/
$e,re& r +igni,i-ant -)ange+ )a2e --*rre/ +*$+e:*ent t t)e la+t a*/it. A ,*ll a*/it
re:*ire+ -#"letin , all , t)e ,ll1ing ")a+e+8
1. (reli#inar. !*r2e. an/ (lanning
2. !.+te# D-*#entatin
9. Internal 6ntrl E2al*atin
%. A*/it (rgra#
5. A*/it Te+ting
6. Re"rt+ an/ 6n,eren-e+
$. 7eneral A*/it - A general a*/it *+*all. /e+ nt re:*ire t)e -#"letin , all t)e ")a+e+
, a ,*ll a*/it. T)e t"i-+ are *+*all. -n/*-te/ .ear a,ter .ear an/ ten/ t re:*ire t)e
+a#e te+ting. T)ere i+ n nee/ t ,*ll. /-*#ent t)e +.+te# an/ -n+i/er t)e i#"a-t ,
internal -ntrl+ again - it i+ nl. ne-e++ar. t en+*re t)at t)e +.+te# )a+ nt /ra+ti-all.
-)ange/ +in-e t)e "rir a*/it.
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-. !"t A*/it - A +"t a*/it i+ a "eri/i- a*/it , a "arti-*lar tran+a-tin at a "arti-*lar
"int in ti#e 1)i-) gi2e+ rea+na$le a++*ran-e t)at -ntrl+ in "la-e are +till 1r?ing.
Re+*lt+ , +"t a*/it+ #a. )el" /eter#ine i, a ,*ll a*/it +)*l/ $e +-)e/*le/. Exa#"le+
are8 an in2entr. l-atin te+t& a +*r"ri+e -a+) -*nt& r an *nann*n-e/ "a.rll
/i+tri$*tin.
/. !it*atinal A*/it - A +it*atinal a*/it i+ narr1er in +-"e t)an a ,*ll a*/it. It+ i+
*+*all. an *nanti-i"ate/ "r3e-t t)at #a. ta?e "ririt. 2er a "lanne/ a*/it. T)e ,-*+
i+ *+*all. $a+e/ n a "re2i*+l. i/enti,ie/ +"e-i,i- -ntrl 1ea?ne++& r t)e li?eli)/
t)at a 1ea?ne++ nt rea/il. i/enti,ia$le exi+t+. Exa#"le+ are8 a #anage#ent r 4ar/
re:*e+te/ +"e-ial "r3e-t& an integrit. r ,ra*/ relate/ i++*e.
e. Fll1-*" A*/it - T)e ,-*+ , a ,ll1-*" a*/it i+ t -nta-t t)e a*/ite/ /e"art#ent
t /eter#ine i, "re2i*+l. agree/ t re-##en/atin+ )a2e $een i#"le#ente/. T)e
,ll1-*" a*/it #a. re:*ire a//itinal te+ting t en+*re t)at -ntrl+ are 1r?ing an/
e,,e-ti2e a+ anti-i"ate/. An atte#"t +)*l/ $e #a/e t -n/*-t a ti#el. ,ll1-*" a*/it
i, a "re2i*+ a*/it *n-2ere/ +eri*+ -ntrl i++*e+.
,. O"inin - An "inin #a. $e re:*ire/ regar/ing a +"e-i,i- i++*e& "r-e/*re& r ta+?. It
i+ "art , Internal A*/it5+ re+"n+i$ilitie+ t "r2i/e -*n+el t #anage#ent. (r2i/ing
a "r,e++inal "inin re:*ire+ ,a-t-,in/ing re+ear-) +*-) a+ rea/ing a*t)ritati2e text+&
)l/ing /i+-*++in+ 1it) ?e. +ta,,& an/ re2ie1ing re+*lt+ , "re2i*+ a*/it+ a+
a""li-a$le.
7. T)e Internal A*/itr 1ill -##*ni-ate re+*lt+ , t)e a*/it. A,ter t)e a*/it ,iel/ 1r? i+
-#"lete/& t)e a*/itr 1ill /i+-*++ t)e re+*lt+ 1it) a*/ite/ /e"art#ent #anage#ent. T)e
Internal A*/itr 1ill "re"are a /ra,t =#ar?e/ ,r /i+-*++in "*r"+e+ nl.> "reli#inar. re"rt
t $e +)are/ 1it) t)e a*/ite/ /e"art#ent #anage#ent. A,ter /i+-*++in an/ re2ie1 1it) t)e
a*/ite/ /e"art#ent #anage#ent a+ t -ntent an/ 1r/ing , t)e re"rt& t)e "reli#inar.
re"rt i+ /ate/& +igne/ $. t)e Internal A*/itr an/ i++*e/ t t)e /e"art#ent #anage#ent. T)e
"re+i/ent +)all re-ei2e a -". , t)e "reli#inar. re"rt. T)e a*/ite/ /e"art#ent )a+ t1
1ee?+ t re+"n/ t an. re-##en/atin+ r -##ent+ -ntaine/ in t)e "reli#inar. re"rt.
T)e "re+i/ent -an a*t)rize an exten+in , t)e re+"n+e /*e /ate i, *nanti-i"ate/
-ir-*#+tan-e+ --*r 1it)in t)e a*/ite/ /e"art#ent. T)e re+"n+e+ +)*l/ ex"lain t)e
/e"art#ent5+ -rre-ti2e a-tin+& t)e /ate+ , i#"le#entatin& r t)e rea+n+ n -rre-ti2e
a-tin 1ill $e ta?en. T)e Internal A*/itr +)all /eter#ine t)e -#"letene++ an/ "r"riet. ,
t)e re+"n+e+. I, t)e re+"n+e+ are /ee#e/ nt a""r"riate& t)e Internal A*/itr 1ill #eet
1it) t)e a*/ite/ /e"art#ent #anage#ent t re-##en/ an alternati2e re+"n+e. T)e
"re+i/ent 1ill re-ei2e a -". , t)e ,inal re+"n+e+. T)e Internal A*/itr 1ill in-r"rate t)e
,inal re+"n+e+ int t)e "reli#inar. re"rt 1it)in t1 1ee?+ , re-ei"t , t)e re+"n+e+. T)e
,inal re"rt& 1)i-) in-l*/e+ #anage#ent5+ re+"n+e+ 1ill $e re2ie1e/ $. t)e A*/it 6)air ,r
-#"letene++. T)e ,inal re"rt 1ill $e /ate/& +igne/ $. t)e Internal A*/itr an/ i++*e/ t t)e
A*/it 6##ittee an/ t t)e "re+i/ent. T)e a*/ite/ /e"art#ent #anage#ent 1ill re-ei2e a
-"..
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;. In +#e -a+e+& a "reli#inar. re"rt i+ nt ne-e++ar. $e-a*+e t)e Internal A*/itr )a+ n
re-##en/atin+ ,r t)e a*/ite/ /e"art#ent #anage#ent r n re+"n+e i+ ne-e++ar.. In
t)e+e -a+e+& t)ere i+ nl. a ,inal re"rt. T)e /ra,t ,inal re"rt 1ill $e /i+-*++e/ 1it) t)e
a*/ite/ /e"art#ent #anage#ent. A,ter /i+-*++in an/ re2ie1 1it) t)e /e"art#ent a+ t
-ntent an/ 1r/ing , t)e re"rt& t)e Internal
A*/itr 1ill ,r1ar/ t)e "re+i/ent a -". , t)e /ra,t re"rt. T)e re"rt 1ill $e re2ie1e/ $.
t)e A*/it 6)air ,r -#"letene++. T)e re"rt 1ill $e /ate/& +igne/ $. t)e Internal A*/itr an/
i++*e/ t t)e A*/it 6##ittee an/ t t)e "re+i/ent. T)e a*/ite/ /e"art#ent #anage#ent 1ill
re-ei2e a -"..
'. A*/it re"rt+ +)*l/ $e /i+tri$*te/ t t)+e 1) are a$le t en+*re t)at a*/it re+*lt+ are gi2en
/*e -n+i/eratin.
!TANDARD! FOR THE (ROFE!!IONAL (RA6TI6E OF INTERNAL AUDITIN78
T)e ,ll1ing in,r#atin i+ ta?en /ire-tl. ,r# t)e !tan/ar/+ ,r t)e (r,e++inal (ra-ti-e ,
Internal A*/iting "*$li+)e/ $. t)e In+tit*te , Internal A*/itr+. It i+ t)e internal a*/itr5+
re+"n+i$ilit. t ,ll1 t)e +tan/ar/+. !tan/ar/+ are t)e -riteria $. 1)i-) t)e "eratin+ , an
internal a*/iting /e"art#ent are e2al*ate/ an/ #ea+*re/. T)e "r-e/*re+ li+te/ a$2e +)*l/ re,le-t
t)e i#"le#entatin , t)e +tan/ar/+.
100 In/e"en/en-e - Internal a*/itr+ +)*l/ $e in/e"en/ent , t)e a-ti2itie+ t)e. a*/it. T)i+ i+
a--#"li+)e/ t)r*g) rganizatinal +tat*+ =t)e /ire-t re"rting relatin+)i" t t)e 4ar/> an/
$3e-ti2it. in "er,r#ing a*/it+.
200 (r,e++inal (r,i-ien-. - Internal a*/it+ +)*l/ $e "er,r#e/ 1it) "r,i-ien-. an/ /*e
"r,e++inal -are. Internal a*/itr+ +)*l/ -#"l. 1it) "r,e++inal +tan/ar/+ , -n/*-t@ t)e.
+)*l/ "++e++ t)e ?n1le/ge& +?ill+& an/ /i+-i"line+ e++ential t t)e "er,r#an-e , internal a*/it+.
Internal a*/itr+ +)*l/ $e +?ille/ in /ealing 1it) "e"le an/ in -##*ni-ating e,,e-ti2el.@ t)e.
+)*l/ #aintain t)eir te-)ni-al -#"eten-e t)r*g) -ntin*ing e/*-atin. Internal a*/itr+ +)*l/
exer-i+e /*e "r,e++inal -are in "er,r#ing a*/it+. T)i+ -all+ ,r t)e a""li-atin , t)e -are an/
+?ill ex"e-te/ , a rea+na$l. "r*/ent an/ -#"etent internal a*/itr in t)e +a#e r +i#ilar
-ir-*#+tan-e+@ it i#"lie+ rea+na$le -are an/ -#"eten-e& nt in,alli$ilit. r extrar/inar.
"er,r#an-e.
900 !-"e , Ar? - T)e +-"e , t)e internal a*/it +)*l/ en-#"a++ t)e exa#inatin an/
e2al*atin , t)e a/e:*a-. an/ e,,e-ti2ene++ , t)e rganizatin5+ +.+te# , internal -ntrl an/ t)e
:*alit. , "er,r#an-e in -arr.ing *t a++igne/ re+"n+i$ilitie+. T)e $3e-ti2e+ , internal -ntrl
are8
1> T)e relia$ilit. an/ integrit. , in,r#atin.
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6Hx7-2.2 Internal Organizatin !e"te#$er 1%& 1''2
2> 6#"lian-e 1it) "li-ie+& "lan+& "r-e/*re+& la1+& an/ reg*latin+.
9> T)e +a,eg*ar/ing , a++et+.
%> T)e e-n#i-al an/ e,,i-ient *+e , re+*r-e+.
5> T)e a--#"li+)#ent , e+ta$li+)e/ $3e-ti2e+ an/ gal+ ,r "eratin+ an/ "rgra#+.
%00 (er,r#an-e , A*/it Ar? - A*/it 1r? +)*l/ in-l*/e "lanning t)e a*/it& -lle-ting&
anal.zing& inter"reting& an/ /-*#enting in,r#atin t +*""rt a*/it re+*lt+& -##*ni-ating
re+*lt+& an/ ,ll1ing *" t a+-ertain t)at a""r"riate a-tin i+ ta?en n re"rte/ a*/it ,in/ing+.
500 0anage#ent , t)e Internal A*/it De"art#ent - T)e Dire-tr , Internal A*/it =i.e.& Internal
A*/itr> +)*l/ "r"erl. #anage t)e /e"art#ent + t)at a*/it 1r? ,*l,ill+ it+ a""r2e/ general
"*r"+e+ an/ re+"n+i$ilitie+ an/ t)at t)e a*/it 1r? -n,r#+ t t)e !tan/ar/+ ,r t)e (r,e++inal
(ra-ti-e , Internal A*/iting.
=Fr# !tan/ar/+ ,r t)e (r,e++inal (ra-ti-e , Internal A*/iting $. T)e In+tit*te , Internal
A*/itr+& 6".rig)t 1'7; $. T)e In+tit*te , Internal A*/itr+& In-.& 2%' 0aitlan/ A2en*e&
Alta#nte !"ring+& FL 92701 U!A. Re"rinte/ 1it) "er#i++in.>
A/"te/ Date8 N2e#$er 2& 1';7
Re2i+in Date8 !e"te#$er 1%& 1''2