POLICY STATEMENT

The internal audit function is an independent, objective appraisal activity for the purpose of advising and assisting the management, staff and Board of Governors of the University of Waterloo in the achievement of the institution’s goals and objectives.

ORGANIZATIONAL STATUS

The internal audit function, through the Director of Internal Audit, shall have direct access to the Audit Committee of the Board of Governors, the University President, and the Vice-President, Academic and Provost.  The Director of Internal Audit shall take to the Chair of the Audit Committee matters that are of significant magnitude or concern to require the immediate attention of the Committee.

The Director of Internal Audit reports administratively to the Secretary of the University.

AUTHORITY, INDEPENDENCE AND OBJECTIVITY

Internal Audit staff shall have access to the University records, physical property, and personnel they require to carry out their responsibilities.  Internal Audit staff shall handle confidential information by adhering to the same restrictions that apply to the unit that compiles it.

Internal auditors should not normally develop records, install procedures or controls, or engage in any activity that would impair their independence and objectivity.  While they may take an active role in the formulation of policies and procedures, or the development of new systems, it will be in an advisory capacity, with final decisions and implementation being the responsibility of the appropriate managers.

Internal Audit staff have no direct responsibility for, or authority over, any of the activities which they review.  The internal audit review and appraisal process does not, therefore, relieve other persons in the organization of the responsibilities assigned to them.  Management is responsible for making appropriate operating decisions after considering internal audit recommendations.  The responsible manager shall report to Internal Audit on the decisions made for each recommendation and the reasons for the decisions.  Normally, this response shall be provided within one month of completion of the internal audit report.

SCOPE AND OBJECTIVES

Internal Audit assists the University in accomplishing its objectives by facilitating a systematic and ongoing evaluation of institutional risk management, control and governing processes.  As part of the audit process, internal auditors will:

• review the reliability, integrity and utility of information used by management for risk-assessment, decision-making, and performance-monitoring,
• assess compliance with approved policies, plans, procedures, laws and regulations,
• ensure that appropriate procedures are in place to safeguard University assets,
• carry out analyses to develop recommendations for the effective and efficient use of resources,
• follow up to assess whether implemented recommendations are achieving the intended results,
• conduct such special investigations and reviews of potential problem areas as are requested by management, or considered essential by the Director of Internal Audit.  The approval of the Vice-President, Academic and Provost shall be obtained if the projects require significant diversions from approved audit plans.

The Director of Internal Audit will consult annually with deans and other senior university administrators in the formulation of audit plans.  A risk analysis process will be used in the development of audit plans for approval by the Vice-President, Academic & Provost and submission to the Audit Committee of the Board of Governors.  The plan will identify and rank audit priorities, the objectives to be met by each audit, and the estimated resources required to complete that audit.  The Director of Internal Audit will meet with the Audit Committee annually to discuss audit results and plans.  With the approval of the Vice-President, Academic & Provost, audit planning procedures may be adjusted periodically as the situation warrants.

COORDINATION WITH EXTERNAL AUDITORS

Internal Audit shall coordinate its plans with those of the external auditors to avoid duplication of audit effort and help ensure optimum audit coverage is obtained.

RESOURCING

The internal audit function should be directed by and staffed with qualified and competent individuals. Minimum qualifications for each position have been established; however, additional experience, training, and aptitudes should also be considered when filling audit positions.  As circumstances require, qualified staff from within the University or consultants may be assigned to assist on specific audit projects.  In these cases, individuals will be selected on the basis of their qualifications for the tasks concerned.

PROFESSIONAL STANDARDS

Internal Auditors shall adhere to the Standards for the Professional Practice of Internal Auditing and the Code of Ethics adopted by the Institute of Internal Auditors.
 
 

                                                                                                                                            November, 1999
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