Page 11 - The Pakistan Accountant

C O VER ST OR Y A Second Check on Operational Efficiencies of a Company  Muhammad Adeel Sarfraz, ACA The concept of Internal Auditing evolved after World War II IA helps an organization accomplish its objectives with the progress of management science. After emersion by bringing a systematic and disciplined approach of ENRON case in 2001, global corporate environment to evaluate and improve the effectiveness of risk significantly moved towards strict compliance and management, control, and governance processes. monitoring of business operations before getting too late to cry over spilled milk. To overcome the risk of business Internal auditors are not responsible for the execution failure in Pakistan, Securities and Exchange Commission of company activities; rather they advise management and the Board of Directors regarding how to better of Pakistan (SECP) issued Code of Corporate Governance execute their responsibilities. However, targeted (Code) in 2002 for regulating and monitoring various department/process owner has a common perception of corporate matters. Among other significant matters, the not sharing their information in full with IA, due to the Code specifically regulated listed companies to establish misunderstanding that the more information IA receive, a separate and independent Internal Audit (IA) function, the more it get opportunities of raising concerns about whose head shall have access to the chair of the Audit their operations. Therefore, the information coming Committee. Despite complying the regulations, IA has out of the department is very limited; which is creating yet to be evolved in its true spirit. Internal Auditing can a gap in working environment and thus encouraging be defined as: inefficiencies in the organization, as a whole. The Pakistan Accountant | Apr-Jun 2014 9