Problem: In a latest seminar on internal audit wherein a group of corporate representatives of corporations (privately and publicly held corporations), several issues were raised by the attendees, a number of which are listed below:
1. Establishing an internal audit function/department is not a legal requirement. Consequently, it is an optional function.
2. In an era of economic difficulties, we need to cut back on overhead such as internal audit functions. Internal audit department does not bring any revenue to the corporation. It is a mere cost center. A company should not establish the function unless it will increase the earnings of the company.
3. If we (corporations) have a legal requirement to have an internal audit function, then staffing it with one person will suffice the requirement.
4. Internal audit function is to compare policy to actual transactions; consequently the internal auditor does not have to be collage graduate.
5. To minimize our cost, we may perform one audit a year, and outsource it to a job shopper.