An Assessment Model of the Internal Controls System
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The chapter focuses on the internal audit function—the third line of defence within the internal control system—whose main purpose is to verify the operational efficacy and efficiency of internal controls. In this regard, an assessment model is proposed, in order to enable the Internal Audit function to express a synthetic opinion of the company’s internal control system on an annual basis. The model is constructed starting from the risk types defined by the company organisational model, identified within the entity-level risks (which affect the overall company structure) and within the process-level risks, which affect individual company processes and are influenced by the former.
KeywordsInternal audit function Risk governance Risk assessment Internal controls system Inherent risk Residual risk
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