Reference no: EM133254009

You are the Chief Audit Executive for the University of Great Grads ("UGG") and you have asked the Internal Audit Manager on your team to draft an internal audit charter You are reviewing the document and have concerns.  Below are excerpts from the draft charter:

EXCERPTS FROM INTERNAL AUDIT CHARTER - UGG

The mission of Internal Audit ("IA") is to increase profitability for UGG.  IA assists UGG with accomplishing its objectives by bringing an ad-hoc approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

IA staff have a responsibility to:

• Maintain sufficient knowledge, skills and experience subject to training budget availability;
• Issue an audit report to management at the conclusion of each audit in order to communicate the audit findings;
• Prepare and present quarterly reports to the audit committee summarizing the status and the results of audit activities.

Management is responsible for following-up on outstanding management action plans to ensure significant risks and major deficiencies identified are effectively addressed and remediated by management within an acceptable timeframe.

REPORTING

A written report will be prepared and issued by the VP Internal Audit following the conclusion of each audit and will be distributed as appropriate. The report will include our findings. 

INDEPENDENCE AND AUTHORITY

To provide for the independence of the Internal Audit Department, the VP Internal Audit will report functionally to the Controller, and dotted line to the Audit Committee. The VP Internal Audit will meet privately at least once every fiscal quarter, with the Audit Committee. 

To remain independent, Internal Auditors are allowed to receive gifts up to $250.    

The VP Internal Audit is also responsible for compliance with privacy legislation and IT security.  

The Internal Audit Department is authorized to have unrestricted access to all company activities, records, property and personnel.

Approved by:                      Title:  Controller                     Date:  June 20, 2020

REQUIRED:

Identify and explain five (5) issues that are present within the charter. Recommend what changes should be made in the charter to address the issues that you identified. Use the following format: