c) Critically analyse the role and place of the internal audit activity in the

Question

c) Critically analyse the role and place of the internal audit activity in the
organisational plan of an organization. Use  South African examples

GPT 3.5 · Answer

The internal audit activity plays a crucial role in the organizational plan of an organization by providing independent and objective assurance on the effectiveness of risk management, control, and governance processes. Internal auditors help organizations achieve their objectives by evaluating and improving the effectiveness of risk management, control, and governance processes.

In South Africa, the role of internal audit has become increasingly important due to the country's complex business environment, regulatory requirements, and evolving risks. The King IV Code of Corporate Governance for South Africa emphasizes the importance of internal audit as a key component of good governance and risk management.

One example of the role of internal audit in South Africa is the case of the Steinhoff International Holdings scandal. In this case, the internal audit function failed to detect accounting irregularities that led to a massive financial scandal and the collapse of the company's share price. This example highlights the importance of a strong and independent internal audit function in providing early warning signals to prevent such incidents.

Another example is the role of internal audit in the South African mining industry, which faces numerous challenges including safety risks, environmental concerns, and regulatory compliance issues. Internal auditors in mining companies play a critical role in assessing and monitoring these risks, ensuring compliance with regulations, and improving operational efficiency.

Overall, the internal audit activity should be integrated into the organizational plan as a strategic partner that adds value, promotes good governance, and helps the organization achieve its objectives. By providing independent assurance and insight, internal auditors can help organizations in South Africa navigate the complex business environment and mitigate risks effectively.