In preparing the annual internal audit plan, the internal auditor shall determine the type of audit to be performed for each audit. The following is a summary of the various types of audits which may generally be conducted.

a)      Financial Audits

These are designed to validate the accuracy and completeness of records and account balances.  Financial audits will utilise substantive tests, analytical reviews and other validation procedures, which may or may not include functional tests or transactional reviews.

The financial audit function develops audit programs to assess, evaluate, and make recommendations to management regarding accounting and financial reporting of transactions and activities. The function's central objective is to ensure that the financial activity of the department, unit or function is completely and accurately reflected in the appropriate financial reports. Some areas which financial audits focus include: segregation of duties, authorizations and approvals, reviews and reconciliations.

Financial audits determine whether the financial information of the Ministry’s function, activity, department or unit under audit fairly represents the financial position, result of operation, and cash flows and changes in financial position of the auditee is in accordance with the Generally Accepted Accounting Principles.


b)     Operational Audits

An operational audit process is designed to:

  • Understand the responsibilities and risk faced by auditable department, unit or process.
  • Assess the level of control exercised by management.
  • Identify, with management participation opportunities for improving control.
  • Provide senior management of the Ministry and audit committee with an understanding of the degree to which management has achieved its responsibilities and mitigated the risk associated with the operations of the Ministry. 

This includes:

i)                    Reliability and integrity of financial and operational information.

ii)                  Effectiveness and efficiency of operations.

iii)                Safeguarding of assets.

iv)                Compliance with laws, regulations and contracts.


c)      Compliance Audits

They involve testing and reporting on whether the Ministry or department has complied with the requirements of various laws, regulations, policies and procedures.  Recommendations typically call for improvements and processes and controls intended to ensure compliance with regulations.

d)     Investigations

Investigations are conducted when there is a suspicion or allegation of fraud, embezzlement, waste, or other "improper governmental activity" to use the legal term. Investigations involve the examination of records and interviews of employees to determine if any illegal activities have taken place, which if proven, normally lead to disciplinary action and/or criminal prosecution.