CIMA - Independent internal audit functions 'vital'06/11/2009An independent internal audit function is vital for good corporate <a href="http://www2.cimaglobal.com/cps/rde/xchg/live/root.xsl/25206.htm" target="_self">governance</a>, businesses have been reminded. According to Allister Wilson, audit partner at Ernst & Young, although internal and external auditors will sometimes find their roles are complementary, the fundamental differences in their work means the two areas must be kept separate. He said: "Whilst it may be acceptable in certain circumstances for a company to engage its external auditors to perform extended external audit procedures, this does not in our view obviate the need for the company also to have a robust and independent internal audit function." Ultimately, the internal audit function is there to support the group chief executive, while the external auditor is accountable to shareholders, Mr Wilson added. Yesterday, the UK Financial Reporting Council advised businesses to exercise caution if they are considering deals which push the internal/external audit boundary as they could face difficulties should the rules on the matter be changed. To find out how to improve online corporate reporting, visit our <a href="http://www2.cimaglobal.com/cps/rde/xchg/SID-0A82C289-BAB53342/live/root.xsl/25197.htm" target="_self">Report Leadership</a> page. <a href="http://www.adfero.co.uk" target="_blank"><img style="border:0 0 0" alt="ADNFCR-8000050-ID-19446974-ADNFCR" src="http://feeds.directnews.co.uk/feedtrack/dn.gif?feedid=8000050&itemid=19446974" />© Adfero Ltd </a>Accountability and audit6 November 2009

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Independent internal audit functions 'vital'...

6 November 2009

An independent internal audit function is vital for good corporate governance, businesses have been reminded.

According to Allister Wilson, audit partner at Ernst & Young, although internal and external auditors will sometimes find their roles are complementary, the fundamental differences in their work means the two areas must be kept separate.

He said: "Whilst it may be acceptable in certain circumstances for a company to engage its external auditors to perform extended external audit procedures, this does not in our view obviate the need for the company also to have a robust and independent internal audit function."

Ultimately, the internal audit function is there to support the group chief executive, while the external auditor is accountable to shareholders, Mr Wilson added.

Yesterday, the UK Financial Reporting Council advised businesses to exercise caution if they are considering deals which push the internal/external audit boundary as they could face difficulties should the rules on the matter be changed.

To find out how to improve online corporate reporting, visit our Report Leadership page.

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