GENERAL INFORMATION

Mission Statement
The Internal Audit Office is an independent appraisal entity which assists the Administration in the discharge of its responsibilities by providing objective analysis, recommendations, and comments regarding the various types of assurance and consultancy services performed.

Vision Statement
Internal Audit is the ethical conscience of the institution, providing professional independent, objective assurance and consultancy services, to the University and its Medical Center

History
The Internal Audit Office of the American University of Beirut was established approximately 30 years ago. Article IV Section 6 of the Corporate Bylaws of AUB states:

 "The Board of Trustees shall elect three or more Trustees to constitute an Audit Committee. The Audit Committee shall recommend an auditor for the Corporation to be appointed by the Board, shall define the scope of the audit to be performed, and shall review the annual financial statements of the Corporation prior to their submission to the Board. The Audit Committee may examine and consider such other matters relating to the internal and external audit of the accounts of the Corporation and relating to the Corporation's financial affairs as the Audit Committee may, in its own discretion, determine to be desirable".

The Internal Audit Office was originally established with a Director and two Assistants.

The Office was restructured in 1997 and presently consists of the Director of Internal Audit, two Audit Managers,four Internal Auditors and an administrative Assistant.

The Director reports to the Audit Committee of the Board of Trustees through the President of the University.

What is Internal Audit?
Established in 1941, The Institute of Internal Auditors (IIA) is an international professional association with global headquarters in Altamonte Springs, Fla., USA. The IIA is the internal audit profession's global voice, recognized authority, acknowledged leader, chief advocate, and principal educator. Members work in internal auditing, risk management, governance, internal control, information technology audit, education, and security. The International Standards for the practice of internal auditing (Standards) and the Code of Ethics of the IIA govern the manner in which internal auditing is conducted.  The Internal Audit Office of AUB helped to establish and continues to be  associated with and the Lebanese Chapter of the IIA.  Internal audit staff are encouraged to obtain the professional designation of Certified Internal Auditor (CIA) which consists of a four part examination administered by the IIA.

Internal Audit is part of the University's quality assurance mechanism. Internal Audit is responsible for verifying that internal controls, the checks and balances in the system, are in place and are effective.

Internal Audit is not responsible for the design or implementation of internal controls: that is the responsibility of management. However, Internal Audit can, and will, provide advice on such controls.

Internal Audit is not the University's "Police Force" or "Fraud Squad". Responsibility for internal controls and the detection of irregularities rests with each department head. However, Internal Audit can, and will, assist in the investigation of known or alleged irregularities.

It is a policy of the University that any case of fraudulent activity must be reported to the Internal Audit Office in accordance with the University Policy on Fraud.

Methodology
The principal types of work undertaken by the Internal Audit Office are:

• Financial Audits that assess the internal controls relating to financial transactions (e.g. accounts payable, travel expenses, cash handling, payroll) of a department or cost center, to determine if further audit work is required. Standard audit programs are generally followed for this type of audit.

• Process Audits assess the controls over a process within the university. As each process is different, a customized audit program must be developed reviewed and implemented for each new audit.

• Operational Reviews which analyse both the financial and operational effectiveness of a department or service within the University,

• Information System /Information Technology Audits which include a detailed review of all computerized management information systems and the hardware infrastructure that they rely on to determine whether appropriate procedures and internal control mechanisms are in place and working as they should.  IT auditing also includes testing of the transactions and underlying data to determine whether it is consistently handled and reliable.

• Co-operative audits involve Internal Audit partnering with the auditee to improve the effectiveness of operations. Internal Audit reviews selected units and makes recommendations to management. The auditee is responsible for implementation of recommendations that are agreed upon. The methodology used in such audits may include both Risk Self Assessment and Control Self Assessment exercises in which the auditee is required to identify risks within their area of operations and the effectiveness of the controls that are in place to mitigate those risks.

• Investigative where the internal auditor examines and reports on specific incidents, departments or operations. This work may be requested by management or the Board of Trustees. It may also be initiated by the Internal Audit Office in consequence of issues noted during the course of other audit work.

Generally all audits follow the same basic steps:

1. Meet with the President, Vice President and/or Department Head, depending on the type of audit, to discuss the audit and obtain input and concerns. 

2. Obtain an understanding of the department/function under review.

3. Notify and discuss with the administrative staff concerned the purpose of the audit.

4. Identify issues of concern and formulate audit objectives.

5. Finalize audit objectives and tests.
   

6. Conduct the audit.
   

7. Review the results of the audit with the auditee.
   

8. Develop the Internal Audit recommendations.
   

9. Review recommendations and obtain management responses.
   

10. Issue an audit report.