To establish the scope and activities of the Internal Audit function within Dewan Bandaraya Kota Kinabalu in accordance with the Standards for the Professional Practice of Internal Auditing.

 NATURE AND DEFINATION OF INTERNAL AUDIT

Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve the organization’s operation. It helps the organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance process.

The objective of Internal Audit is to help management discharge its responsibilities effectively. In this regard, Internal Audit searches for causes of inefficiencies or uneconomical practices so that management may correct these practices. Internal Audit furnishes management with analyses, appraisals, recommendations and pertinent comments concerning activities reviewed.

The attainment of this overall objective involves reviewing accounting, financial, other operations and systems, both manual and electronic, to determine for top management that :

• assets are properly accounted for and safeguarded from losses;
• management plans, policies and procedures are followed and carried out effectively and efficiently;

• adequate accounting and managerial controls exist and function properly in relation to the organisation’s objectives;

• recommendations are implemented for appropriate improvements in control;
• timely, useful and reliable data exist for decision making.

RESPONSIBILITY AND AUTHORITY:

The responsibility of Internal Audit within the organisation are established by this Charter in accordance with prescribed Auditing Standards.

Internal Audit has the authority to inspect records and property at any location relevant to the subject under review. It is expected that departments or activities under review will provide every possible assistance to facilitate the progress of the audit.

The Head of Internal Audit Division has direct liaison with the Mayor Of Kota Kinabalu City Hall and independent access to all other levels of management. The Head of Internal Audit Division will submit to the Mayor an annual audit work plan for approval. The Mayor will receive all final Audit Reports. Each year a report of Internal Audit activities will be presented to the Mayor, Director General and Sectorial Heads for their information.

In order to avoid duplication of effort, all audit effort will be coordinated. To this end, the Head Of  Internal Audit will coordinate his audit work with that of the external auditors.

In accordance with Auditing Standards, Internal Audit has no direct responsibility for or authority over any of the activities reviewed. An Internal Audit review and appraisal, therefore, does not in any way relieve managers in the organisation from their regular responsibilities assigned to them.

Independence is essential to the effectiveness of the Internal Audit function. This independence is established and maintained by organisational status and objectivity.

Objectivity: Objectivity is critical to the independence of the audit function. Auditors therefore, should not develop and install procedures, prepare records or engage in other activities which could compromise their independence.

Auditor’s objectivity does not preclude determining and recommending standards of control to be applied in the development of systems - manual and/or electronic - or the reviewing of procedures before they are implemented.