ERM Glossary: Audit Function
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The (internal) audit function of a firm is the part of the
firm that is charged with carrying out reviews aiming at helping the firm
achieve its stated objectives. It does this by using a systematic methodology
for analysing business processes, procedures and activities with the aim of
highlighting organisational weaknesses and recommending solutions.
The scope of internal auditing within an organization is
often broad. It may involve topics such as the efficacy of operations, the
reliability of financial reporting, deterring and investigating fraud,
safeguarding assets, and compliance with laws and regulations. Within a
financial firm, compliance with laws and regulations is typically important
enough to require the establishment of a specific compliance function.
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