Useful Audit Definitions
System: process by which a series of related activities are designed to operate together to achieve a planned objective.
Internal control: management function of acting to ensure that objectives are achieved, including effectiveness, economy, efficiency, compliance (policies procedures statutory), safeguarding assets, integrity and reliability of management information.
Value for Money: designed to ensure that the University receives optimum value for each £ spent, involving performance and quality factors as well as cost, through :
Economy: minimising cost of resources of an activity, having regard to quality;
Effectiveness: extent to which objectives are achieved;
Efficiency: relationship between output in terms of goods and services, and the resources consumed.
It should be noted therefore that value for money does not always mean the selection of the cheapest option, but encourages the selection of the most cost-effective option.
Risk: a number of possible circumstances that deter the achievement of set objectives. The IIA (Institute of Internal Auditors) define risk based internal auditing as a method which links internal auditing to an organisation's overall risk management framework, allowing internal auditors to provide assurance to the board that risk management processes are managing risks effectively.