Independence of internal audit – between theory and pragmatism

Author:University professor, PhD. Ana MORARIU, PhD. student Anca AMUZA CONABIE

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Keywords:objectives, independence, report, cost – benefits, weakness, terms

Abstract:
The development of the internal audit became a real necessity for the effectiveness of the largest Romanian companies, in order to fulfill the performance criteria of the European and International companies’ highest level.\r\n\r\nThe importance of the internal audit is generated by its involvement in finding any dysfunctions of the entity working system, or its straightness.\r\n\r\nThe best practices in the field accept internal audit as an “independent objective assurance and consulting activity design to add value and improve an entity’s operation. It helps an entity accomplish it’s objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance process”.\r\n\r\nThe business environment has to take into account this manner, mostly recommended by the Standards for the professional practice of internal auditing, issued by the Institute of Internal Auditors (I.I.A.). \r\nUnder these circumstances, it is necessary to make a clear distinction between internal control and internal audit, obviously. The first should be a system drown to ensure the management objectives and the second should asses the functionality of internal control aimed the fraud prevention.\r\n\r\nWithal, in a performing business environment the above consideration has to emphasize the separate goals of the financial audit -“as an independent opinion of the financial statements” - and the internal audit – ”as an activity directed to support the management functions in relation to the internal control”, for the benefit of a real corporate governance.\r\n\r\nIt worth to notice that developing an internal audit activity should base on proper conditionality of the specific standards, practices and ethics, otherwise recommended by the Chamber of Financial Auditors of Romania, in order to support its members and any other specialists running such activity, also.

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