Article Review On Incorporating of Internal Audit Function

Published: 2021-06-18 05:20:11
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Category: Finance, Time Management, Law, Human Resource Management

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Introduction

Internal audit refers to an objective declaration and independent activity consultative in nature and which is designed to enrich the value and advance the daily operations of an organization. This helps a given organization to achieve its desired ends since it brings in a disciplined and systematic approach on how to approach, improve and evaluate efficiency of managing risks, governance and control processes. (Picket 81).

Internal audit catalyses improvement in an organizations’ efficiency and effectiveness by giving room for recommendations and insights which are normally inclined upon assessment of data, analyses of such data and the processes of conducting such business. Internal auditors are normally committed to accountability and integrity especially in the manner with which finances are handled. This gives value to the governing authority and/ or management after which an informed and independent opinion can be attributed to any given cause.

In its broad sense, internal auditing is wide in its scope and may seek to unravel mysteries surrounding an organization’s effectiveness in handling given operations, financial channels by evaluating the reliability with which finances are recorded and reported, adherence to regulations, policies and laws, fraud investigations among others.(Picket 87).
It may also seek to gauge compliance with the existing procedures and policies of a given entity. However, internal auditors may not confine themselves with executing activities of an entity but may advice the management and the directorate.

With close reference to the first paragraph of the article on Wall Street journal titled “12 are charged in Medicare Fraud Schemes Said to Cost $95 Million", the soft under-belly of fraudulent schemes that were hatched to milk the government of its money has been brought to light. It also portrays the extent at which various governments are operating various programmes at a loss on grounds of fraudulent schemes.

This article is relevant to this course on internal auditing. This is true because the nefarious deeds that have been executed by the members of the medical staff calls for application of auditing skills so as to fix the mess. The Justice Department, Department of Health and the special team that were to be appointed have to apply skills in auditing to unearth the extent of the health fraud. Simply put, the fraudulent dealings as executed by the medical staff in the article necessitate the intervention of professionals in internal auditing.

Most probably, the Medicare sector was exposed to many risks that relates to its governance and operations which provided a conducive environment for fraudulent schemes to thrive. It was also suffering efficiency and effectiveness problems and unreliable integrities among those who were at the helm which consequently led to lack of integrity in handling operational and financial information. As such, it was riddled with fraud whose aftermath was the loss of $95 million. Lastly, for fraud to thrive, the existing regulations, laws and compliance must have not been complied with.

This fraudulent behavior, as was manifested by the members of the Medicare staff should be corrected by evaluating effectiveness and the adequacy with which financial risks can be managed through an intervention of both internal and external audits. To avoid such scams in future, critical aspects of values and ethics should be instilled within the Medicare through managing performance, communicating risk factors and facilitating the process of good governance.

Works cited

City Room: 12 Are Charged in Medicare Fraud Schemes Said to Cost $95 Million. Available on http//:cityroom.blogs.nytimes. com/2011/11/02/12-are-charged- in- Medicare- fraud –schemes
Spencer, Picket , Audit Planning – A Risk Based Approach. New Jersey: The Institute of Internal Auditors. 2006 print.

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