CHALLENGES OF INTERNAL AUDIT IN THE CURRENT CRISIS

Abstract

Modern economic theories reject the generalization of theories concerning the economic and financial crises. Each financial crisis is unique, a historic accident, generated by specific factors in a certain socio-economic and political set-up. According to these theories, crises cannot be anticipated so as to minimize their negative effects. In spite of the fact that economic and financial crises are not identical and do not produce identical effects, history teaches us that they are strongly correlated with the cyclic nature of economic processes. The current economic recession, which shows in all fields of activity, is determining auditors to make evaluations which are a lot more precise, based on extensive procedures, as long as the presumption of activity continuity into the future is accurate. In this context, internal audit is individualized as an managerial assistance function, which allows a correct perception of the reality of the business as a whole and/or as predefined processes. The purpose of this paper is to create an overall picture of internal audit by collecting data and information from literature and showing the dimensions and the internal audit practices internationally. Therefore, we conducted a research based on the analysis of national and international publications, various articles and studies in the financial press, on the emergence and development of the internal audit function both internationally and nationally. Later we analyzed the position of internal audit in terms of global financial crisis, all these leading to the usage of a comparative study of twelve international companies in order to highlight the specific features of the internal audit function in each organization. Our intention is to emphasize aspects of internal audit departments, relations between them and the management, their role in companies based on studies provided by Protiviti, a global consulting and internal audit services company, having experts specializing in risk, consultancy and transactions.

Keywords

• audit; internal audit; audit practices; multinational corporations