The financial department sent us a draft set of 3Q financial statement for our review!!. What is the role/involvement of the Internal Audit in the review of the FS. I am a bet confused !!.

Gentelmen
Any feedback ???

Although I am not a gentleman...I'll take a stab at an answer.

If you are a publicly traded company, you should have external auditors review your financials. This does not necessarily mean you shouldn't review them. I recently asked our audit committee if they felt I should review items (like financials) that were reviewed by external auditors. They thought it was a good idea. What does your audit program say about reviewing financials?

In our bank, audit reviews the 10-K pretty extensively (not sure about the 10-Q), checking numbers and what not. This falls more under the special project heading. Specific accounts are "audited" at varying times throughout the year pursuant to the audit schedule.

Audit also provides significant assistance to the external auditors during the year end audit. Much of this work is used to satisfy internal audit requirements in order to avoid duplication of effort.

Unless your department has been regularly conducting a review of the control structure for completing the financials as well as the call report, I don't know how you could provide any comfort that this quarterly report was compiled accurately. Internal and external auditors should be reviewing how the finance department is compiling the financials, determining that the control structure is strong and call report/gaap is being followed. So, is this the first time it was presented to you ? Maybe somebody read Sarbanes/Oxley for the first time and realized they needed this review before they attest to its accuracy.

Financial Control Department request from the Internal Audit to review the quarterly financial statement raises an area of concern on "what is the role of the Audit Department with regard to the review of the financial statement". As a standard practic, the review of the financial statements means to certify that the financial statements do not contain any materially incorrect information which cause the financial statement to be misleading. The Internal Audit's scope of work, as per our Audit Charter, is to review the efficiency and effectiveness of the operation, compliance, and adequacy and effectiveness of internal controls throughout the bank. Therefore, the Internal Audit's scope of work in the bank does not directly qualify to give such an opinion on the financial statement.

I review the 10Q for our institution every quarter. Our external auditors review them obviously more thoroughly than I do. However, I am just looking at them to see if anything appears out of ordinary in comparison to prior years and quarters. However, the audit committee has made it very clear that I am not certifying anything.