This study is presenting the contribution of internal audit in managerial practice in an
organization. For the research purpose TaTa Motors which is leading and one of the largest automobile company in the world was explore as a case study. This company has a significance role of internal audit in innovation and organization success. For this study data was collected through quantitative approach employing by questionnaire that was sent by email. The main variable were explore in this study are role of internal audit, risk minimization, improvement in decision making process and effects of internal audit in an organization. These variables help to construct and measure the internal audit effectiveness in an organization. The result of study shows that the internal audit helps the organization to achieve better level of efficiency in term of organization performance. Moreover the internal audit directed the organization in right path and identifies the loop wholes and identifies the old fashion way of operations in any department of organization. Internal audit create an environment within organization which provide competitiveness among different departments of an organization and provide and edge over competitors. The result shows that internal audit is as important as the external audit for any business.
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Table of Contents Abstract.i Acknowledgementii Statement of originality authenticity.iii Abstract ........................................................................................................................................................ 1 Statement of Originality and Authenticity ................................................................................................ 2 Please note that Dissertations may not be assessed without the inclusion of electronic copies which may be submitted through the turnitin software to check for authenticity. ............... 2 Acknowledgement ...................................................................................................................................... 3 Chapter 1 ....................................................................................................................................................... 7 1. Introduction ......................................................................................................................................... 7 1.1 Back ground and context of study .................................................................................. 7 1.2 Research Aims & Objective ............................................................................................ 8 1.3 Importance & Rational of the Study ........................................................................... 8 1.4 Structure of study ............................................................................................................ 9 Chapter 1: ........................................................................................................................................ 9 Chapter 2: ........................................................................................................................................ 9 Chapter 3: ........................................................................................................................................ 9 Chapter 4: ........................................................................................................................................ 9 Chapter 5: ........................................................................................................................................ 9 Chapter 2 ..................................................................................................................................................... 10 2. Literature Review ........................................................................................................... 10 2.1 Significance of Audit ............................................................................................ 10 2.2 Aspects of internal audit ............................................................................................... 10 2.3 Areas where internal audit operates in an organization ................................................ 11 2.3.1 Re-evaluation financial activities ......................................................................................... 11 2.3.2 Evaluation and governance of fiscal and operational content .............................................. 11 2.3.3 Assessment of cost-effective system, perfection, and affective of transaction regarding non fiscal relations of an organization ................................................................................................. 11 2.4 Function of IA ............................................................................................................... 11 2.5 Benefits of Internal Audit .................................................................................... 12 2.6 Function of internal audit within organization effectiveness ........................................ 12 2.6.1Role of internal audit in control ............................................................................................ 13 2.6.2 Role in Corporate governance .............................................................................................. 13 2.6.3 Theatrical role in Risk Management .................................................................................... 14 2.6.4 Role in minimizing cost of external audit ............................................................................ 14 2.6.5. Internal audit as Strategic adviser ....................................................................................... 15 2.6.6 Role in Improving Economy and efficiency ........................................................................ 15 2.6.7Internal audit in establishing good internal communications................................................ 16 2.7. Role in discharge of responsibilities of employees ...................................................... 16 2.7.1 Benefits to the manager of the unit being audited ................................................................ 16 2.7.2 The use of audit results by other review groups in the organization .................................... 16 2.7.3 Benefits to the corporation as a whole ................................................................................. 16 2.7.4 Use of internal audit results for external auditor .................................................................. 17 2.7.5 Increases efficiency of future audits .................................................................................... 17 2.8 Benefits to the manager of the unit being audited ........................................................ 18 2.9 The use of audit results by other review groups in the organization ............................. 18 2.10 Benefits to the corporation as a whole ........................................................................ 18 2.11 Use of internal audit results for external auditor ......................................................... 19 2.12 Barriers to successful Audit Results ........................................................................... 19 2.12.1 Conflicting goals: Management and auditor ...................................................................... 19 2.12.2 Absence of full range of technical competence ................................................................. 20 2.12.3 Neglect of the most important phase of the audit .............................................................. 20 2.12.4 Neglecting the fundamental of communication ................................................................. 21 2.12.5Independence of internal auditors ....................................................................................... 21 2. 12.6 approach of Auditors, process of internal audit ................................................................ 22 2.12.7 Interaction rights ................................................................................................................ 22 Critical Analysis: ........................................................................................................................................ 22 Conclusion .................................................................................................................................................. 23 CHAPTER 3 ............................................................................................................................................... 24 3. Research Methodology ................................................................................................... 24 3.1. Research Procedure ...................................................................................................... 24 3.2. Study Setting ................................................................................................................ 24 3.3. Investigation of study ................................................................................................... 25 3.4. Collection of Data ........................................................................................................ 25 3.4.1. Primary Research ................................................................................................................ 25 3.4.2. Questionnaire as research instrument.................................................................................. 25 3.4.3. Population ........................................................................................................................... 26 3.4.4. Sampling Method ................................................................................................................ 26 3.4.5. Sample Size ......................................................................................................................... 26 3.4.6. Purpose for samples ............................................................................................................ 26 3.4.7. Scale .................................................................................................................................... 27 3.4.8. Reliability of Scale .............................................................................................................. 27 3.4.9. Collection of secondary data ............................................................................................... 27 3.4.10. Secondary Data Sources .................................................................................................... 27 3.5. Interference of Researchers.......................................................................................... 27 3.6. Research Ethics ............................................................................................................ 28 3.7. Time Scale.................................................................................................................... 28 Chapter 4 ..................................................................................................................................................... 29 Data Presentation and Analysis and Results and Discussions .............................................................. 29 Descriptive Analysis ........................................................................................................... 29 4.1 ................................................................................................................................................. 29 Chapter 6 .................................................................................................................................................... 56 Conclusion ......................................................................................................................... 56 Recommendations: ...................................................................................................................................... 60 P ERS ONAL DEVELOP MENT ................................................................................................... 62 References .................................................................................................................................................. 63 Appendixes ................................................................................................................................................. 66
Chapter 1
1. Introduction 1.1 Back ground and context of study Form last few decades the organizations are facing the internal and external risk which seriously affect the organization performance and profitability. For that purpose they identify the tools to overcome these internal and external threats. In developed countries they introduced word audit which provide them plat form where they can identify external internal risk. Internal audit is one of the tools or process comprise of procedures to rectify the internal risk. According to Nigussie Fantaya 2007 Internal audit is a set of function constituted by the establishment review by the organizations inside activity divine service organizations. It goal to analyzes, valuates and studies connected the quality of the internal control exact at stake, the economic and efficient use of resources. In this study researcher try to identify what is the strategic contribution of internal audit in managerial practices in an organization? In this study we take TaTa motors as case study and find the relationship between internal audit and strategic practice. Internal audit is the part of control system of economic and otherwise determined by the management company to do business properly and effectively, to ensure compliance with policies to protect the possession and assured as achievable the logicality and quality of the information. In this we study try identifying the role internal audit in managerial practice, why internal audit is important for organization to enhance the performance of organization. There are different aspect try to discuss in this study. Confirmed Codjia (2010) on the importance of internal control mechanisms in the institutions of corporate governance through the assessment of the activities of audit firms "and make sure they are appropriate and consistent with the recommendation of the senior management guidelines and human resources. Internal audit helps the company to adhere to the rules and legal practices in the industry. Intrinsic auditors are critical to effective corporate governance and achievement of organization objectives, because they spend all of their time within on company as a result they have much greater knowledge about the companies as a result they have much greater knowledge about the companys operations and internal control than external auditors and hence in providing better recommendations (Elder, et al, 2010). Context of the organization TaTa Motors is one of the India's renowned and largest auto mobile companies having $3.7 billion in terms of revenue in 2012-2013. It comprises of different segments like commercial vehicles, passengers vehicles, mid size car and utility cars are included in production. It is the fourth largest truck and buses manufacturing company around the world. With over 60 thousand of workforce accomplish the mission "To be passionate in anticipating and providing the best vehicles and experiences that excite our customers globally". TaTa Motors was established in 1945 different part of India. There are different production units spreading all over the country. Fiat and TaTa Motors joined the companies in 2005 it has a industrial joint venture. The company dealership, spare parts, sales and services network comprise over 3500 touch point.
1.2 Research Aims & Objective 1. What is the strategic contribution of internal audit in managerial practices in an organization? (A case study of TATA Motors) Action research cannot be aimlessly outside, but it has to be guided focus. This study is mixed with the following objectives. Objective 1. Role of internal audit in organization 2. What effects come on an organization using internal audit effectively? 3. How internal audit improve decision making process 4. To reduce the risk in an organization 1.3 Importance & Rational of the Study This study will show the importance of internal audit and the future standing of it. This study will provide you deep knowledge of internal audit. This study is comprised of different features; firstly this research will provide the sensibility of internal audit. This study would provide insights about internal audit and factors which are crucial for any organization and also rectify the intensity of those factors. This study will align internal audit with managerial practice and organization performance. Moreover this research will discuss different types of quality standard and there importance in side of an organization. This study will discuss different function of internal audit affect the performance of an organization. This study will also provide insights of a case study TaTa Motors, their processes or procedures and quality management. The results of this research can be used in future by Motor Industry. 1.4 Structure of study The current study is comprised of following chapters. Chapter 1: The first chapter comprise of a concise introduction of topic which investigate under the light of research question and objectives. This chapter also include the context, rational, scope and importance of study. Chapter 2: Second chapter provide a detailed review of literature comprise of different papers, studies researched to be done in past related to this subject. In the light of various studies researcher can develop a reasonable understanding of current subject. Chapter 3: The third chapter based on research methodology designed to gathered information and data and give a complete overview of methodology to be adopted in this study. More over research methodology wltsill enclose the technique and method in which the results and findings will be discussed. Chapter 4: Chapter 4 is based on analysis of data collected from methodology described in third chapter. Moreover this chapter will highlight the relationship between findings and literature and conclude whether literature oppose or support the findings. Chapter 5: In last chapter we conclude the study and provide an essential implication to the people who relate to this study in addition enlist the limitations of current research and provide a opportunity to upcoming researchers.
Chapter 2
2. Literature Review Literature review emphasis on past studies to be done on selected research topic. What is internal audit? Internal audit is existed an autonomous assessment of function constituted by the establishment review by the organizations inside activity divine service organizations. It goal to analyzes, valuates and studies connected the quality of the internal control exact at stake, the economic and efficient use of resources Nigussie Fantaya 2007. 2.1 Significance of Audit The activities design related to independent internal audit add the value to enhance operations and objectives of the organization. Internal audit helps to improve the performance of the organization through organize and systematic way to examine and manage the risk through processes, monitoring with control. Internal audit provide consistency with effectiveness as well as efficient discharge guide and control of the organization, executive produced by back internal customers, management, and control and risk management processes Schulze, G. G., & Frank, B. (2003). 2.2 Aspects of internal audit Basically there are mainly two aspects of internal audit a) Operational Audit b) Management Audit In working order evaluation concerns with investigation for the functions and actions set provides an assessment of whether each unit apartment operating in accordance with established rules and procedures, and if the standards of efficiency and economy remain Metadel Abera, (2006) . It concern with 1) Design of plans 2) Implementation of plans 3) Control and evaluation Management audit involves the audit of propriety, authority, compliance with policies, etc. 2.3 Areas where internal audit operates in an organization Internal audit operate in following areas 2.3.1 Re-evaluation financial activities The organization of correct financial and affiliated activities are the obligation establishment, which requires complete care regularly inspection is often chosen by management a special responsibility for the financial statements and the attendant inside relations, observation their business activity and advocating transformations Barac,etal,2009 . 2.3.2 Evaluation and governance of fiscal and operational content It could consider an appraisal of the substance utilized to refer, standard, classify and report such information and individual elements of particular research testing of transactions, balances and procedures including detailed Barac, etal, 2009. 2.3.3 Assessment of cost-effective system, perfection, and affective of transaction regarding non fiscal relations of an organization In general, the external auditor usually takes interest in the findings of examination activity in case when there is a necessary role in the dependability of activity records Barac, etal, 2009. 2.4 Function of IA Internal audit is existed an autonomous assessment of the review activity an organization accounting, financial activities and other database management ASA preserving and formative divine of service. This is a type of control which directs to measurement and appraising the efficacy of different controls. This is mainly for account and fiscal issues, as well as can adequately address issues that operate in nature Marquis codjia, 2010. The internal auditor to audit the accounts and other relevant records on a daily basis, regularly or periodically perform following requirements: 1. Internal audit determine all the rules, regulations, policies, procedures, and self-sufficiency through by the company is or is not 2. To review the existing internal control system is adequate and effective and in accordance with the balls and the organization. 3. To ensure that all of the assets of the organization are managed properly, otherwise the report on management to do with suggestions refund. 4. To highlight the weaknesses of the organization, and they to strengthen suggestions. 5. To check to see if the work is smooth Organization, effective, efficient and economical. 2.5 Benefits of Internal Audit Internal audit is a constant procedure many benefits that can be discerned and these can include: 1. Management will be led by careful management of the major business issues which gives an analysis of the deficiencies in the control system, which can improve the practical tips (Basu, 2006). 2. To ensure that these controls are operating satisfactorily. 3. These actions to advance the competence and efficiency of specific 4. It provides information about potential problems early. The administrator can then take action if necessary 2.6 Function of internal audit within organization effectiveness Internal audit is the part of control system of economic and otherwise determined by the management company to do business properly and effectively, to ensure compliance with policies to protect the possession and assured as achievable the logicality and quality of the information. The company "s control and practices, such as Internal audit is generally believed critical to the success of the absence to be because it acts as a powerful brake any deviation from the standard policy objectives and unused. This means that the organization, appropriate and adequate system of checking the accounts activates is likely to better financial results than those who have not Heinecke, P. (2011) argues that the internal audit functions of the company can be significantly affect activities of the company and many have influence on the ability of the device to continue the activities. 2.6.1Role of internal audit in control The internal audit focused on improving internal controls. In order to the Committee of Sponsoring Organizations of the committee on how the tread (COSO), as well as the internal control process of the Board and director of the entity (BOD), organization of man power give the platform to logical assurance as to ensure the accomplishment the goals in different categories implementation of internal controls to do Klier (2009). Success and effectiveness of process The dependability of financial statements For acquiescence through rules along with policy Administration is liable to conduct audit. Management to policies and procedures in the direction to achieve target develop exact goals in every department. There is a main function of internal audit to assure the implementation of rules and regulations and recommend the improvements in each categories Pickett, 2005, also stated the role of internal audit as internal audit set what is found during an audit against what should be present to ensure good control Heinecke, P. (2011) has explained the functions of internal audit in control as follows internal audit. Reviews validity of financial and other information Evaluate the procedures established for assurance within managements rules, strategy, actions plus any appropriate laws and policy. Reviews the resources of protection the origination resources Appraises the financial system and competences within the organizations resources are engaged. Evaluate the result according to determined goals and objectives 2.6.2 Role in Corporate governance Structural governance locate procedure and structure compositions implication by CA to report immediately to the management of resources, strategies and policies in the organization, and monitor some organizations, and are often considered the accounting and within the "four pillars" of corporate governance, and other substrates are BOD, management and the external auditor. Confirmed Codjia (2010) on the importance of internal control mechanisms in the institutions of corporate governance through the assessment of the activities of audit firms "and make sure they are appropriate and consistent with the recommendation of the senior management guidelines and human resources. Internal audit helps the company to adhere to the rules and legal practices in the industry. Intrinsic auditors are critical to effective corporate governance and achievement of organization objectives, because they spend all of their time within on company as a result they have much greater knowledge about the companies as a result they have much greater knowledge about the companys operations and internal control than external auditors and hence in providing better recommendations (Elder, et al, 2010).
2.6.3 Theatrical role in Risk Management Professional standards for internal auditing IIA2120 require monitoring and evaluating the efficiency of the organizations risk managing process. The management of risk to attain organization goals are determined the shape and then identifies and analyzes risks and responding to their ability to influence to achieve their goals. According to PPIA Professional Practice of Internal Auditing (2011) determine the efficiency of internal audit in following: 2. Goals of the organization and support in line organizations objectives. 3. Significance of identifiable risk 4. Exact action to those risks in line with the risk appetite of the organization. Is the collection of relevant information and risk communication at right time from organization that employees, managing in addition to the center for the performance of its duties (IIA 2120). 2.6.4 Role in minimizing cost of external audit According to the Elder (2010), and dependence on external and internal auditors on risk assessments whether the internal auditors, external accountants and tax effective risk reduction and, thus, significantly reducing the functional tests. This allows reviewers to reduce significantly if the customer has a representative of the internal audit their expenses. The external auditor can be used. The internal auditor's direct support of our control Referring to the internal audit function to run some tests and see the external audit are able to complete in less time and at a lower price, the test. 2.6.5. Internal audit as Strategic adviser Look beyond the processes and internal controls and auditing can play an advisory role within the organization. It may be Identify cost-effectiveness of the projects and the general They make strategic visions to improve business performance Make the perspective of the main focus on the risks that matter (Ernst andyoung 2010) Internal auditors, as stated in institute of internal auditors professional practice frame work, provide consulting work focused on value-added operations of the organization. They also provide information which is reliable and used for strategic business decisions. As a result they minimize information risk, too, which it is possible that the information a decision of enterprise risk was wrong, which is defined as y Elder, (2010)
2.6.6 Role in Improving Economy and efficiency According to the U.S General Accounting Office (GAO), audit determines 1) If the entity already runs its own resources (staff and buildings) economical and efficient. 2) Reasons of failure and inefficiency 3) Is the organization performing their activities within the rules and regulation such as economically and fuel consumption. Internal audit in its finding determines the above all the provide how to improve weakness and maintain strengths which intern increases economic use of resources and efficiencies by avoiding misuses. 2.6.7Internal audit in establishing good internal communications The internal auditors duties bring him into contact with all department of his organization, since his role is to check on the effectiveness of the system and the security of its assets at all levels. Naturally he will want to know the organization of responsibilities and manuals of operation of each department and provide remedies for inefficiencies of each unit in the organization and creating common understanding between the auditor and managers or other senior officers (Bigg and Davies, 1980). 2.7. Role in discharge of responsibilities of employees The Institute of Internal Auditors (IIA) explained why internal audit is importance of every part of organization in order to perform their activities. To do so, provides analysis, ratings, recommendations, advice and information on the activities of the Internal Audit Service As cited in Ernst and young, 2010, also expressed internal auditing as it is independent assessment activity began to "internal audit activities of others through creating conducive environment in work place and serving as information communicator. 2.7.1 Benefits to the manager of the unit being audited The audit report shows the weakness and strength of an organization and recommendations for improvement. The internal auditors shall also discuss with issues that require improvement with management so as to enable the manager better understand and accept the problem, and the rationale for recommendations on timely basis. In doing so, management used the result of the audit to save time, money, and effort, as well as to reduce the risk of loss of funds while achieving corporate results H. Spencer Pickett, 2005. 2.7.2 The use of audit results by other review groups in the organization This refers to the extent of the use made of the results by other review groups in the organization, which may help them to save time, effort and money in conducting their own reviews. The director of audit department is liable and must plan audits in such a way that the information contained in each report can be used by others in the organization. The higher the review groups who use the audit results, the higher the successfulness of the audit Dereje Workie, 2007 2.7.3 Benefits to the corporation as a whole An audit report consisting of information logically structured provides foundation to reducing cost gathering information, saving task force time and effort, and providing general assistance. Internal audit could serve as a database for important information about the history of and problems in the organization, providing that the results of each audit were planned and structured in such way to provide this information Marquis codjia, 2010. Internal auditors of an organization shall have access to all organizational units to gather, store and retrieve information from each. This enables auditors to look at the key results areas of the organization and determined whether there were sufficient controls to ensure that the goals were being achieved. Since only people can achieve results, the internal audit group could have ensured that members of the organization were being evaluated effectively. The most logical way to do this is to review the performance appraisals. Internal audit is one of the most important aspects of internal control because it is the people in the organization that make the other controls work. If the people are not being properly evaluated, senior management should know about it before it becomes a problem. Therefore, had the audit group planned and structured each audit so that performance appraisal was always included, they could have been in a position to maintain available source of information that could be updated regularly. When computer are used in internal audit, useful information becomes available in a format that will make it easy for the auditors to study, analyse and determine the linkage and causes of the problem within the corporate organization. Internal auditor are an integral parts of management control and will contribute to top management strategy, provide service beyond simply finding faults and can play a role in resolution of corporate problems and improvement of management performance without impairing of its independence. 2.7.4 Use of internal audit results for external auditor Internal audit is a successful if it has strong leadership; a professional staff and a strict adherence to internal auditing standards with often external auditors rely on to save time and money. This would also reduce the cost of auditing (Elder, 2010). 2.7.5 Increases efficiency of future audits An audit which is structured in a logical way is useful to save time and effort in the future. An audit result is useful for future reports if the corporate and internal audit long range plans are linked each other. The strategy is developed at the beginning of each audit specifying what requirement the audit is going to satisfy, who is going to use the information from the audit, what information from the audit should be maintained for future use Marquis codjia, 2010. Documentation of previous work serve as reference for current year audit works as a result it reduces time and effort. The internal auditor must realize that a system is needed to save time in the future, and ensure that a data gathering system is set up. If information is gathered and documented for each unit, it will be possible to look at a summary report for each unit and quickly obtain a general understanding of how they operate, and the auditor can use this file if they are worthwhile for current year audit H. Spencer Pickett, 2005. 2.8 Benefits to the manager of the unit being audited The audit report shows the weakness and strength of an organization and recommendations for improvement. The internal auditors shall also discuss with issues that require improvement with management so as to enable the manager better understand and accept the problem, and the rationale for recommendations on timely basis. In doing so, management used the result of the audit to save time, money, and effort, as well as to reduce the risk of loss of funds while achieving corporate results. 2.9 The use of audit results by other review groups in the organization This refers to the extent of the use made of the results by other review groups in the organization, which may help them to save time, effort and money in conducting their own reviews. The higher the review groups who use the audit results, the higher the successfulness of the audit. . 2.10 Benefits to the corporation as a whole Internal audit could serve as a database for important information about the history of and problems in the organization, providing that the results of each audit were planned and structured in such way to provide this information. Internal auditors of an organization shall have access to all organizational units to gather, store and retrieve information from each. This enables auditors to look at the key results areas of the organization and determined whether there were sufficient controls to ensure that the goals were being achieved. Since only people can achieve results, the internal audit group could have ensured that members of the organization were being evaluated effectively. The most logical way to do this is to review the performance appraisals. Internal audit is one of the most important aspects of internal control because it is the people in the organization that make the other controls work. If the people are not being properly evaluated, senior management should know about it before it becomes a problem. Therefore, had the audit group planned and structured each audit so that performance appraisal was always included, they could have been in a position to maintain available source of information that could be updated regularly. When computer are used in internal audit, useful information becomes available in a format that will make it easy for the auditors to study, analyze and determine the linkage and causes of the problem within the corporate organization. Internal auditor are an integral parts of management control and will contribute to top management strategy, provide service beyond simply finding faults and can play a role in resolution of corporate problems and improvement of management performance without impairing of its independence.. 2.11 Use of internal audit results for external auditor Internal audit is a successful if it has strong leadership; a professional staff and a strict adherence to internal auditing standards with often external auditors rely on to save time and money. This would also reduce the cost of auditing (Elder, 2010). 2.12 Barriers to successful Audit Results Barriers are obstacles which encounter the auditors, and have an impact on their performance resulting in unsuccessful audit results. The most important barriers include: 2.12.1 Conflicting goals: Management and auditor This barrier arises due to internal auditors lack of understanding of managements goals and the ensuring conflicts that arise. According to Brathwaite, 1988, conflicts frequently a rise when the auditor doesnt take the time to understand what management wants. This neglect causes he auditor to make audit observations that appear irrelevant to management and therefore create conflict. Consequently, what could be an excellent audit is not considered as such and when this happens management ignores the observations and recommends actions not a useful situation. Because internal auditors usually begin their work with an audit program designed to concentrate on control and risks, they are seldom able to include statement concerning the objectives of the unit. Without knowing these, it is impossible for auditors to link the audit observations and recommendations to the results and services of the organization. If the auditors are not absolutely clear on both the goals of the manager of the unit and the quality of service that the corporation as a whole is aspiring to provide, they cannot possibly show management the relevance or benefits of the observations and recommendations for management point of view (Brathwait, 1988). 2.12.2 Absence of full range of technical competence Many internal auditors are interested in maintaining high standards for their profession. They are concerned about the number of practicing internal audit managers and staff who do not possess the necessary qualifications to do a credible job. Some contend that internal audit department is often staffed with individuals with varied specialized knowledge, some of whom are not interested in a career in internal auditing. It is perhaps not necessary for these employees to be professionally qualified. Others suggest that because most of the senior advisor an accountant, and the economic advisor and economist it stands to reason that the internal audit advisor should be professionally qualified. In organizations where the head of audit department is not professionally qualified there are serious implications for the future of the internal audit group corporate institute and the inside auditing occupation as whole. Lack of technical competence can also affect hiring decisions. Poor hiring decision have a high cost. Another area that could be affected by the absence technical competence is moral in the audit organization. Internal auditors get frustrated, as would anyone else, when professionally qualified employees are evaluated by superiors who lack similar qualification. 2.12.3 Neglect of the most important phase of the audit Business organizations are increasingly complex and this means that relationships among data and information now require analysis as opposed to simple reporting. In the past, internal auditors were content to simply state the facts to management. They expected favorable response compliance and financial audits, which form the audit majority, require little evidence is conclusive. Traditionally, the analysis phase of the audit was not even identified to management as being an integral part of the audit; this is largely still true today. This neglect had been the direct cause of audit failure. Where analysis is missing in internal auditing, the interrelationship among observations and impacts of all observation on the corporate entity may not be understandable (Brathwait, 2010). There are some important steps that would help internal auditors break with tradition and make their work more meaningful to management. These are planning, field work, analysis and reporting which are the corner stone of successful internal audit. Analysis of audit results enhances the quality of recommendation and better understanding of inefficiencies. Therefore, neglecting one of the above steps would result in audit failure. 2.12.4 Neglecting the fundamental of communication Learning how to communicate clearly with the entity audited is important for successful audit results. As Brathwait, 2010, noted, inadequate planning creates a barrier during the initial communication between the auditor and the audited organization (audited) poor communication of audit results has caused the downfall of some audits and led to a negative misconception about auditors. 2.12.5Independence of internal auditors Lack of independence has a greater impact on auditors successful performance of their responsibility. Independence is a major requirement for audit to allow a clear increase in organizational and personnel activities. In Biggs and Davies 2001, point of view lack of internal audit department will affect The ability to set down, without bias, fear or equivocation the auditor judgment on very part of organization activities. The ability to arrange the audit work comprises of all business exclusive of requirement any permission. The ability toward deliver reports any management level As the Institute of Internal Auditors directed to the independence of the internal auditor: 1. Reports on the state of executive control line or CEO (CAE) to the Director of Internal Audit should be within the organization that allows the creation of a level. Internal Audit Executive CAE responsibilities and must be connected to the board, at least annually, the organizational independence of the internal audit function (IIA Standard 1110). Regulatory independence is achieved when really knows CAE and functionally to the Governing Board (GB Practice Advisor 1110 A1). The Council is the governing body , as the Board of Directors , Supervisory Board, the head of the agency or legislative body , the Board of Directors or the Supervisory Board in a nonprofit organization or other body responsible for the organization, including the audit committee , chief executive may functionally report control (IIA Glossary ) 2. 12.6 approach of Auditors, process of internal audit Internal audit activity away from interference in determining the scope of internal auditing, performing work, and communicating results of this practice (IIA consultant 1110A1). 2.12.7 Interaction rights The directors of audit department have rights to communicate with BODs (IIA standard) Davies, 2002, also stated that, the internal audit department shall have ability to deliver reports to all appropriate level of management. The IIA further explains that independence is not only assured by having organization status, but also through objectivity. Objectivity is essential to the audit function. Therefore, internal auditors should not develop and install procedures, proper records, or engage in any other activity which they would normally review and appraise and which could reasonably be constructed to compromise the independence of the internal auditor. The internal auditors objectivity need not be adversely affected, however, by determining and recommending standards of control to be applied in the development of the systems and procedures being reviewed.Thus, Internal Auditor is not one of the organization controls, corporate control, to control all the other simple. For this reason, internal audit should not be to maximize design and implementation of institutional controls, not the objectivity, internal auditors should serve the organization as an independent expert in the controller. Design, implementation and testing of controls is a conflict of interest (Simmonsb, 2010). Critical Analysis: If we take a look on broad prospect of internal audit how identify the internal organizational and external environment. In literature review mostly writers agreed that internal audit adds value and supports the achievement of the objectives to make recommendations for improvement, and the production of information and training of supervisors in understanding and application of objective and independent process monitoring and self-assessment activities business and others within the organization. One very interesting thing we can see in this literature that there is no conflict that internal audit is help to minimize the risk and provide a foundation to external audit. According to different writers internal audit is a management monitoring tools across their operations help the entire organization through the study and evaluation of the adequacy and effectiveness of internal control system and risk management, quality and governance processes. Literature basically discuss the organization provides internal audit analysis, evaluation and recommendations, advice and information. The aim is to ensure that the internal control system, also taking into account the information produced by the external auditors and administrative functions can be sure that the goals and objectives are achieved reasonable and efficient operations and reporting is reliable and the laws and regulations and respect the assets remains. Conclusion Internal audit serves the most significant role for many companies in preventing the fraud and it also help the firm to detect the kind of fraud and other kinds of accounting irregularities. In many firms, audit professional help in designing and modifying the internal control system that aims at preventing the firm in meeting fraud and other accounting errors in financial reports. If the firm is famous for its strong and active auditing system in market, it not only saves its employees and reputation but also it retains credibility and trust of its stakeholders. The prosper usage of all means of communication in the organization can increase the efficiency of the employees and produces the open culture where all employees coordinate with each other because of communication. In evaluating the strategic and auditing skills to meet the organizational objectives, most of the firms use three elements in the skills audit which may prove to be more effective and result-oriented.
CHAPTER 3 3. Research Methodology Research methodology is a combination of prescribed method or procedure design to accomplish to achieve the research objectives (Begievi, et.al, 2007). Its follows systematic approach to avoid the uncertainties related research. Second chapter provide the detail insight about the concept of internal audit and significance in current era. Internal Audit is very important to a company and it is necessary to polish their skills and motivate them towards achieving organizational goals (Carolyn, 1997). This chapter encapsulates the detailed procedures and methods applied for inquiring role of Internal Audit (Adrian, et. al. 2009). In addition to this it covers the details about sampling techniques, research instrument and statistical tools adopted to achieve the objectives of research. The entire study tends to examine the overall effects of motivation which results in efficiency and better performance of organization and to find out whether the relation exist within the organizations or not? This research is base on following procedures and guidelines. The concepts of these procedures, methods or techniques highlight below. 3.1. Research Procedure The research aims what is the strategic contribution of internal audit in managerial practices in an organization and for this reason several components that make up the internal audit variable are identified by means of literature and the previous researches. The general research question is formulated and the basic purpose of the study is to answer this question by means of data analysis and interpretations (Heinecke, 2011). Quantitative research method is used for data collection (Klier, 2009). The responses collected from the sample are quantified for gaining information about the relevant variables. 3.2. Study Setting Environment in which the research is conducted plays a significance role to shaping the research effectively. There are several mediating variables existing in the environment and play their parts in determining the relationship among variables under consideration. In researches, the importance of explanation of setting of study to generalize the result, influence of related factors use for recommendation design accordingly. This study conducted in non-contrived and purpose to establish association between internal audit and strategic practice. 3.3. Investigation of study In business research investigation could be carried in different way. During research researchers focus on different variables to identify the appropriate method of research which identify the definite method to investigate the relationship between independent and dependent variable. The aim of this study is to relate the internal audit and strategic practice therefore this type of study is co-relation. 3.4. Collection of Data Data collection method is a research tool for data access through a process of preparation. This method and device development, and how to get the data, and data collection for an environment that is pre - data collection are the many. Data Collection and most of the primary and secondary sources are used. Study on the method of data collection and sample details of the effects of internal audit work after the control " is defined: 3.4.1. Primary Research First hand research and data collected directly through is a search tool that collects the data directly from the part of the organization, and a question has been sent via email to the opportunity to do research and surveys to gather information. Limited time responses reactions were taken from the sample and the reaction are analyzed using statistical software. 3.4.2. Questionnaire as research instrument The purpose of questionnaire is to cover all the aspects of internal audit. Different The questionnaire, which placed all sections of internal audit reflected in the relevant variables and developed demographically, to be tested later in the report. Questionnaire surveys section variable areas and I tried to protect the section office level remainder was used to distinguish cut to divide the entire sample, which contains a number of variables with Age, sex and position in the organization of the three variables that are large section of the survey demographic. Section is on its performance data that respondents indicate that their responses and other quantitative data analysis answers are successful. 3.4.3. Population According to the secondary information and Companys official sources, it was identified that total number of employees within the selected organization are almost 400. However, it is not possible for the researcher to collect the data from the entire population. Therefore a sample is selected carefully from the specified population and the results have been generalized for the entire population. 3.4.4. Sampling Method Non probability sampling does not allow the researcher to select the sample randomly. This sampling technique is further subdivided into many categories (Sachse, 2012). On the basis of purpose of research and keeping in view the target sample in mind, it was identified that researchers has predefined sets of sample in mind (Petruzzellis, et. al, 2006). Hence the sampling purposive method, which is a kind of sampling rates are used to search for. In addition, we found that subsets easily accessible and can be explained on the purpose and design of the study. 3.4.5. Sample Size The size of sample is very important to justify the results. It must be enough in size to generalize the results. To ensure the validity or reliability of scale, the understanding of basic aspects of and completely define sample size is very important for the people. During selecting sample size researchers must be very careful if the sample size is not suitable or define properly many of research problems can be arise and the research could not lead attain desire results. For these reasons 90 to 150 employees chosen from population as sample size and objectives of study define to them. 3.4.6. Purpose for samples Data has been collected from the employees from TaTa Motors and it has been ensured that employees from all levels in the organization have been selected. In addition to this, it is ensured that the entire sample constitutes the educated people who are graduated from the professional colleges or universities. Another factor that was taken into account while selecting the sample groups were their position in organizations. Employees of all levels associated with the firm (TaTa) directly involved in the performance of organization have been selected so that the actual relationship between motivation factors and performance could be identified (Osman and Mehmat, 2006). 3.4.7. Scale To examine or estimated response of sample Likert-Scale was used, the test results in the states. For this alternative, the respondents agree or disagree with this assertion. Then encoded at different levels and ensure the effects of the variables together. 3.4.8. Reliability of Scale The Chronbach alpha indicator is use for scale of reliability. This indicator produces the reliable results when the value of this indicator is more than 0.6. If the value of this indicator is less than 0.6 then the reliability is not suitable for research. To check the scales of reliability by enter a variable into a statistical tool and by adding hypothetical data. It indicates the scale use for collection of responses from sample is reliable or not. 3.4.9. Collection of secondary data It is essential for the researcher to gain insight about the topic and the relevant variables. In addition to this, it was essential that the researches to be considered conducted in related subject thats why researcher can find the ways of adding more scope in addition to studying their affect. Internal Audit is a well known concept, however for identifying several possible variables that are related to internal audit, there is a need to explore secondary sources. Secondary data which has been utilized in this study was mostly comprised of journal articles, book chapters and other credible web sources. The secondary research has been done by means of digital libraries which present a wide database to the people related to the literary work and scholarly articles. 3.4.10. Secondary Data Sources Digital Libraries and Databases are the major sources of getting access to secondary data. In addition to this, the official sources of the company like employment records and the other related sources were also examined for the selection of appropriate samples. The companys authorized sources were the mainly trustworthy sources hence the reliability of information and credibility of information is not challengeable. Performance of the employees was further inquired by consulting the records and with the help of these measures, the data was filtered. 3.5. Interference of Researchers The interference of researches shows the tendency to influence and manage the proffered variables. Generally, manipulation is a scientific experimentation with the limited size of local control. Therefore, the ability to reduce the overall results, such as the environment in general, and there are many things that can be controlled and renaming variables, directly or indirectly, can be. Search in current accounts to determine the impact on performance of the organization is fully in the responses of the survey sample. The study was conducted in an environment that is not artificial, and therefore it is not possible for the researchers to control variables and control conditions. Therefore, the investigator's intervention is minimized. 3.6. Research Ethics As it has been described that research comprise of both primary and secondary data, so that researcher must be follow the ethics of research. So many ethical rules and regulation define by different researchers according to nature of research acquiring set of ethics (Koh & Boo2005). As concern about primary research the first and major ethic is too kept all the information provides by respondent will be kept confidential. Confidentiality is important factors ensure the respondents that the official information keep confidential and do not disclose to anyone (Trevio, 2005). To prove this point even no one question was related to their name and designation for this reason questionnaire could attain disclosure of information. Secondary data include the studies already done to related topic considered for information available in libraries or on online. The majority of study or researchers have their own copyrights so that it is unethical to cut or copy information from their work directly. To ensure the reliability of research make sure every part of this research is not plagiarized therefore the previous researches and studies considered for the sake of deep knowledge to related topic and evaluate the appropriate variables. 3.7. Time Scale The purposes of most of academic studies conducted are cross sectional thats why base on limited time of period. The collection process helps by once for the researches and cases. Thats why this research to be considered as a cross sectional research because data was collected once and the research was design within limited time of period in an academic institution.
Chapter 4
Data Presentation and Analysis and Results and Discussions Descriptive Analysis The analysis and computation of the research data has been done careful and researcher has developed a frequency distribution for every question a developed some tables and graphs showing the exact results of collected data. so in these tables and graph, authors has indicated the degree of responses and agreement to the question which are highly related to audit of firm are given in the following tables. 4.1 What is your gender? Table of total classification of respondents in TaTA Company
Employees Gender % male 90 60 female 60 40 total 150 100
Bar Chart of Total Number of employees who responded the questions
Interpretation: The reserachesr has selscted 150 respndants from the company and he has selected both male and female employees who have been asked to respond the various questions about the intended research which has successfully focused on the internal audit of TATA company. It is researcher selective approach for asking questions about the research objectves to various respondants. The researcher took higher ratio of men over women and out of 150 selected respondants, 90 were men while 60 were wormen with the ratio of 60% and 40% respectively which has been shown in the table and Bar chart respectively. It was the researcher intention to select more male over female as male are supposed be to more competent according to firms offical record and have been on the key post for many years. The authors also saw some good potential in males responses to questionaires over female. Usually researcher has preferred to ask the questions from well educated employees who have been serving TaTa motor company over the many years who have been much familiar with the different approaches which have been used over the years in company.
4.2 What is your age? _____________ Year. 1.3 2.7 13.3 54.7 28 0 10 20 30 40 50 60 strongly disagree disagree moderately agree agree strongly agree Percent Performance of firm due to adaptations and standardization Table of Employees Age
Sr. No Employees Age Average Age 1 45 18-25 21.5 2 10 26-35 30 3 30 36-45 40 4 15 46-55 50 5 20 56-60 52.5 6 30 61-66 57.5 Total 150
Interpretation The researcher has selected 150 respondants from the company and he has selected both male and female employees who have been asked to respond the various questions about the intended researcher which has successfully focused on the internal audit of TATA company. It 0 20 40 60 80 100 120 140 160 1 2 3 4 5 6 7 Employees Average Age is researcher selective approach for asking questions about the research objectves to various respondants. The researcher took higher ratio of men over women and out of 150 selected respondants, 90 were men while 60 were women. Employees selcted for the research were from 18 years to 60 years. The researcher selected most of respondants from 18 to 25 years of age as these employees seemed more potential and industrious for their career ponit of view. In the above-mentioned table it is evident that author has approached to 30 old employees who have been the part of TaTa motor company and these employees were highly influenced by the auditing of the organization over the period of time. The major purpose of aksing and writing this question was to see how many employees have been or will be influnced by autiding of the firm over the period of time. Also this question also highlight the approach of researcher in meeting his research objectives. Thus employees having age from 18 to 60 years have been classified in the table and have been shown in Bar Chart with their respective represenattaion in the research.
4.3: Do employees have understanding and knowledge about internal audit of the firm?
Employees Know about Internal Audit
Knowledge about Audit Percentage Employees Unknown Percentage male 90 60 66.66666667 33.33333 female 60 40 66.66666667 33.33333 total 150 100
Interpretation: The researcher asked the question about the level of understanding to auditing to employees when he has approached. The reserachesr has selscted 150 respndants from the company and he hasselected both male ans dfemale employees who have been asked to resposnd the variosu questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. So the reseracher intention to inquire to various employees about the level of awarness to auditing has been reflcetd in the table and it has been shown in the bar Chart. In the table we have seen that only 66.66% of male have greta awraeness about the auditing while few employees are still unknown to auidting which is done on yarly basis in company. In the same way, authors has also pointed out the frmale ration about the awareness to auidting and only 40 femaales out of 60 showed their huge level of undersstanfing to auidting. It means that reseracher has selcetd those pupoulation in TaTa motor compnay who has vast knowledge about auditing and carry higher acquaintances with auditing.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Knowledge about Audit Percentage Unknwon Percenatge Employees Know about Internal Audit total female male 4.5 Do Employees think internal audit play an important role in an organization?
Employees think about the role of Internal Audit in organizational success employees consent Percentage for consent employees Percentage male 90 45 50 50 female 60 55 91.66666667 8.333333333 total 150 100
Interpretation: In the questionaire, the reseracher asked employees about the role of intrenal nasuidit for the sucees of organzation and respondanst were asled to select either Yes or No repsone. For getting the resposne,The reserachesr has selscted 150 respndants from the company and he hasselected both male ans dfemale employees who have been asked to resposnd the variosu questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. From the tabel it is evdient that resrrachsr has an eqaull level of resposne for the question and 50% of male employees ,mentioned that intrenarl auidt play the effetceive role in the success of firm while 50% of 0 20 40 60 80 100 120 140 160 male female total Employees think about the role of Internal Audit in organizational success Employees think about the role of Internal Audit in organizational success employees consent Employees think about the role of Internal Audit in organizational success Percentage for consent male employees were not satisfied from the role of internal auditing in the success of firmBut reserachre got very impressive resposne frty of from female and major of bfemale showed their sataifaction on the role of auditing in the uplift and success of TaTa motor. Making the huge comapsrion on the level of perfromave due to auidting in the firm, Resercahsr has further asked many questions to both male and females about auditing with its due effect.
4.6 Internal audit department can set down opinion and provide recommendation on every aspect of the organization without bias of fear? Internal audit department can set down opinion and provide recommendation on every aspect of the organization without bias of fear Frequency Percent Valid Percent Cumulative Percent strongly disagree 12 8 8 8 Disagree 43 28.666667 28.66666667 36.66667 Neutral 55 36.666667 36.66666667 73.33333 Agree 15 10 10 83.33333 strongly agree 25 16.666667 16.66666667 100 Total 150 100
interpretation in questionaire, the rscahsr has respnsdanst from TaTa motor company that to what level auidt department can prodvdie its opinion and recommendation about the perfromance of firm which can be more helpful in meeting the strtagic gaols. So for taking the nnswer, The reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the variosu questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. In the above-mentioed table, resercaher has depcted the responses from employees that only 36% of employees showed their consent and asked that auidit departemnst can presnst its opinion and recoomentaion without any baise and fear. So only 16.67% of employees ere agreed by the resercaher question about the internal audit deaprtment recommednationa nd opion which are formulated without any bais and fear. Thus in the light of literuate where Pickett agrred that internal auidt perform and make recommendation after making evelautioing the policies and specfic objectives. He also emphasied that internal audit can provdie more effeictve impromvemsnt and recoomentaion wthout any fear and bias.
0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent 4.7 Internal audit department has unrestricted access to all units of an organization? Internal audit department has unrestricted access to all units of an organization
interpretation the resercahra incldued the question of whtjer internal audits department in TaTa motor company has unrestected access to all units for gaining their opion or in the implemensttaion of certain policies there. For the purpsoe of knowing the responses,The reserachesr selscted 150 respndants from the both male ans dfemale employees who have been asked to resposnd 0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent Comulative Percent the that questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn and he found that only 65% of employyes showedtheir newyrual respsoesn to that particular question. Only 10% of employees gave postive feedback about the unrestcited access to all units in Tata company by internal auditors in firm. While 35% of employees were strongly disagreed from the questions. In the above mentioned table, resercajer has shown the table and Bar Chart which indiecates the percenatge of employees with their respeivyve resposnes to the question. In the light of liteeraure reviw, (Basu, 2006 ) mentioedn that in any organziation intrenatl auisdt departmenst may or may not have unrestrcted access to all units for evaluting the performnace and effeicny of particular department and help the firm to gain strategic objectives.
4.8 There is a strong relationship between internal audit and strategic practices? There is a strong relationship between internal audit and strategic practices
interpretation the resercahra incldued the question of whtjer there is strong relationship between internal audits and startegic objectives in TaTa motor company. For the purpsoe of knowing the responsesThe reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. From the resposnes of employees which resecar has mentioned in table indicates that 36.67% of employees were neutrally agreed with the resecaer question and said that TaTa motro company has the high level of asociation between the intrenal audits and straegic objectives. While16.67% of employees awere both agreed and stronlg agreed from the resercah question about the huge asoctaion of intrenal audits and straegic objectives of firm. The finding of resposne of question from employees has been depcted in the above- mentioned table with the Bar Chart. Heinecke, (2011) mentioned that organization has the strong association when it decides to meet its strategic objectives, it also looks at the role of internal audit. He is also of the opinion that both strategic practices and internal audits are interrelated which can both help the company to achieve its desired objectives. Internal auditors performs management function or make management decision Internal auditors performs management function or make management decision Frequency Percent Valid Percent Cumulative Percent strongly disagree 40 26.666667 26.66666667 26.66667 Disagree 15 10 10 36.66667 Neutral 35 23.333333 23.33333333 60 Agree 45 30 30 90 strongly agree 15 10 10 100 Total 150 100
interpretation the resercahra included the question of whether internal audits peform well the function of managemnet in TaTa motor company. For the purpsoe of knowing the responsesThe The reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particluar questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. From the findisng of resracher about this question, alemployees resposne have been decpited in abobe-mentione dtable along withBar Chart. Only 30% of employees were agreed about the functions of managmenst in light of recommedation and decsion by internal auditors. While 26.67% of employees were strongly disagreed with the role of intrenal auidots in the managemnt functions.in the light of literature review, according to Heinecke (2011) mentioned that organization expects more recommendation and opinions in the process of making policies and strategies which can be used for attaining the strategic objectives. He was of the opinion that employees can expect better auditing techniques which are more favourable for organization which if be implemented.
4.10 Audit department can arrange the audit work as to cover any area of the business without requiring specific permission Frequency Percent Valid Cumulative
interpretation the researcher has asked the question about the possisble and relevant information about the permission of other department in getting inofmrtaion for audit purppose from other department and reserachesr selscted 150 respndants from the company both male and female employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The repsone taken from slected employees has been shown in the table and Bar Chart whch indicates that 36% of both male and female employees were neutral and were of the opinion that auidt department can arrange work for getting information fro other department in order to obtain information from other department. So in the light of 0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent literature review, audit deprtment can take some assistance from managers and leaders in the firm for facilitating audit department for getting relevant infromation which can save time and money for the firm and it also help firm to meet its straegic goals on the collaboration of other department.. ( Elder, 2010).
interpretation 0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent all firm face the possilble risks in the environment and to know about the auidt role in minimzing the risks faced by firm, researcher included this question and he selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The reseracher found the resposnes from both female and male and showed them in table and Bar Chart.33% of firms employees were stringly disagreed with the role of auidtor in helping firm to minimize the risks while same ratio of employees in the firm were strongly agreed with role of audit departemnt which help firm to curb the threats and risks from both interal and external environment. Thus in the light of literature review, it is because of audit department that help Organizational objectives to be more supportive and align with the organizations missions and significant risks are identified and assessed and these are captured and communicated in timely manner across the organization, enabling staff, management and the board to carry out their responsibilities According to international standards for the professional practices of internal auditing, (2011)
interpretation the reseracher asked the question of performance of orgnziation because of audit from both male and female employees and the reserachesr selscted 150 respndants from the company and he both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The resposne taken from employees has been shown in table an dBar Chart where 26.67% of firms employees were stringy agreed with the question and said that auidt depratment help the firm in improving the performance of firm while the same ratio of employees were neutral in answering. So resercher found few percenatge of employees who were strongly disagreed with the role of audit in helpin firm to improve its efficiency and business.thus in the light of literature review, the firm internal audit department can play the effective role in identifying the and offering the strategic insights that help the firm to improve its business performance. It also help firm to Provide a key perspective that focus on the risks that matter (Ernst andyoung, 2010). Internal auditors also provide information which is reliable and used for strategic business decisions. As a result they minimize information risk, too, which is the possibility that the information up on which the business risk decision was made inaccurate, as defined by Elder, (2010)
interpretation the reseracher asked the question about the possible recommendation and suggestions for firm which are implemented in the firm or these are discarded by the higher management in the firm. For the purpsoe of finding the relevnat answer, the reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The resposne taken from employees has been shown in table an dBar Chart where 23.13% of employees were disgareed and said that management usualy ignore the recommednations and 0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent suggestions which are forwarded to them by auditors while the same ratio were agreed that firm consider the recommednation and suggestion of auditors in their business operation and in making the important decisions. So in the light of literature review, suggestion made of the results by audit groups in the organization help them to save time, effort and money in conducting their own reviews .thus management in the firm consider the higher the review groups who use the audit results, the higher the successfulness of the audit Dereje Workie, 2007 4.14 Internal audit play a vital role in decision making process? Frequency Percent Valid Percent Cumulative Percent strongly disagree 15 10 10 10 Disagree 40 26.66667 26.66667 36.66667 Neutral 40 26.66667 26.66667 63.33333 Agree 25 16.66667 16.66667 80 strongly agree 30 20 20 100 Total 150 100
0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent Interpretation the reseracher asked the question from employees about the role of audit in maing decsion making process and for the purpsoe of response, the reserachesr has selscted 150 respndants from the company and he hasselected both male ans dfemale employees who have been asked to resposnd the variosu questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. . The resposne taken from employees has been shown in table an dBar Chart where 26.67% of employees were neutral and disagrred with the reserachesr and said that auidt department may or may not be more effective in decsion making process of the firm. While 20% of firm employees were strongly agreed with the role of audit which play more effectively in decision making process. Thus in the light of literature review, Internal audit is one of the most important aspects of decision making process which help the firm to make important plan and to maintain available source of information that could be used regularly.
4.15. Internal audit provides assistance to management in evaluation, appraisal and monitoring of individual schemes? Frequency Percent Valid Percent Cumulative Percent strongly disagree 45 30 10 10 Disagree 20 13.33333333 26.66667 36.66667 Neutral 30 20 26.66667 63.33333 Agree 25 16.66666667 16.66667 80 strongly agree 30 20 20 100 Total 150 100
interpretation the reserachsr asked the question about the roleof aauidt to assist firm in making evaluation and appraisal scheme for the firm and for the purpose of getting resposne on this question, the reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The resposne of responadnat have been shown in table and Bar Chart where 30% of employees were srongly diaagreed that auidt department cannot assiat in evelatung and appraisal making scheme for emplyees in firm. While 20% of employees were strongly agreed and neutral with the role of auidting department in making evaluation and appraisal in the firm. In the light of literature review, The strategy is developed at the beginning of each audit specifying what requirement the audit is going to satisfy, who is going to use the information from the audit, what information from the audit for the purpose of evaluation should be maintained for future use (Marquis codjia, 2010) 4.16 internal audit examine and evaluate the reliability of information? Frequency Percent Valid Percent Cumulative Percent strongly disagree 15 10 10 10 0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent Disagree 30 20 20 30 Neutral 30 20 20 50 Agree 25 16.66667 16.66667 66.66667 strongly agree 50 33.33333 33.33333 100 Total 150 100
interpretation the reseracher asked the question about the reliabilty of information which is examined by auidt department and for the purpsoe of getting the resposne, the reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The resposne of employees have been shwon in table an dBar Chart which indictaes that 33.33% of employees were strongly agreed that auidt department evalsute and exmaine all kinds of information while auditing and 10% of employees were strongy disagreed that audit department can not examine the information more accuratley. So in the light of literature review, Internal audit is one of the most important aspects of making every information to check and monitor because it is the people in the organization that make the other controls work. Therefore, had the audit group planned and structured each audit so that performance 0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent appraisal was always included, they could have been in a position to maintain available source of information that could be updated regularly.
interpretation the researcher asked the question about the auidt help the firm to achaive its objectives and for the purpose of getting the resposne, the reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch 0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The response takenfrom various employees have been shown in tabel and Bar Chart which indicates tf ehat 26.67% of employees were strongly agreed that auidt help the firm to achive its intended objectives which also saves time and money for the firm.while 16.67% of employees were strongly disagreed that auidt deprtment can not help the firm in getting its objectives. So in the light of literature review, Internal help the firm to control of weaknesses in the system of control, and it leads the firm to positive assurance when controls are operating satisfactorily and it also help the firm to identify opportunities for improved efficiency and effectiveness and it also help the firm to take necessary measures for every problems. (Basu, 2006)
4.18 Internal auditors performs management function or make management decision Frequency Percent Valid Percent Cumulative Percent strongly disagree 15 10 10 10 Disagree 20 13.33333 13.33333 23.33333 Neutral 30 20 20 43.33333 Agree 25 16.66667 16.66667 60 strongly agree 60 40 40 100 Total 150 100
interpretation the reseracher asked the question about the management funstion perfomed by internal auditors and for the purpsoe of getting resposne,the reserachesr has selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The resposne taken from employees have been shown in table and Bar Chart which indicates that 40% of employees were strongly agreed that internal auditor perform many management function while 10% of employees were stringly disagreed that internal audit can not perform management function. So in the light of literature review, weakness and strength of an organization and recommendations for improvement are taken when internal auditors perform the management function in the firm. (Spencer pickett,2005)
0 20 40 60 80 100 120 140 160 strongly disagree Disagree Neutral Agree strongly agree Total Series1 Series2 Series3 Series4 Series5 4.19 Internal audit give a foundation for external audit? Frequency Percent Valid Percent Cumulative Percent strongly disagree 25 16.66666667 16.66667 16.66667 Disagree 20 13.33333333 13.33333 30 Neutral 20 13.33333333 13.33333 43.33333 Agree 25 16.66666667 16.66667 60 strongly agree 60 40 40 100 Total 150 100
interpretation the resercaher asked the question that internal auditrs provide chnace to external auditors and for getting the resposne from employees, the reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The resposne of employees is haoen in Table an dBar Chart which indicates that 40% of employees were strongly agreed 0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent that internal auditors cause to invite external auditors when some wrongdoings are done in auidting. While 16.67# of employees were strongly disagreed about external auditors come in the organzation because of intrenal auditors. In the lightt of litertaure review, because internal auditors usually begin their work with an audit program designed to concentrate on control and risks, they are seldom able to include statement concerning the objectives of the unit. Which invites external auditors to audit observations and recommendations to the results and services of the organization. If the auditors are not absolutely clear on both the goals of the manager of the unit and the quality of service that the corporation as a whole is aspiring to provide, they cannot possibly show management the relevance or benefits of the observations and recommendations for management point of view (Brathwait, 1988).
4.20 Internal audit does not provide any direction to improve organization efficiency.? Frequency Percent Valid Percent Cumulative Percent strongly disagree 35 23.33333 23.33333333 23.33333 Disagree 30 20 20 43.33333 Neutral 40 26.66667 26.66666667 70 Agree 25 16.66667 16.66666667 86.66667 strongly agree 20 13.33333 13.33333333 100 Total 150 100
interpretation the reseracher asked the question about that intrenal auditors does not provdie any improvement in the organziational efeicncy. For getting the resposne from employees, the reserachesr selscted 150 respndants from the company both male ans dfemale employees who have been asked to resposnd the particular questions about the intended resercah which has successfully focsed on the internal audit of TATA company. It is reesaher selciev apprach for asking questions about the reserch objectves to various respondants. The resrraher took higher artio of men over men and out of 150 selected respondants, 90 were men while 60 were wormn. The resposne taken fromemployees have been shown in the table and Bar Chart which indicates that 23.33% of employees were strongly disagreed while 26.67% of employyes were neutral and 13.33% of employees were strongly agreed, in the light of literature review, firm take more assiatnace from the suggestion and recommendtaions of internal auditors which sometime play effective role in bringing more efficiency to organization.
0 20 40 60 80 100 120 140 160 Frequency Percent Valid Percent Comulative Percent Chapter 6 Conclusion Through auditing the efficiency of company is evaluated and it is considered as most vital element for maintaining and achieving the overall objectives. Reliable financial reporting a strong tool that help firm to prevent fraud and misappropriation of its assets and it also help firm to reduce its cost of capital. Thus both internal and external auditors play the important contribution to the audit system of firm in better ways. Auditing system helps the firm to attain its various corporate objectives through the involvement of employees and various form of internal financial control which regularly detect and prevent irregular transaction, measure employees and organizational performance and help the firm to maintain its adequate business records. Thus internal auditors help the firm to review the design of internal controls and propose various suggestions and improvements in the firm. If the firm has strong auditing system, it can reduce the various firms of risks like information risks, risk of being fraud and misappropriation of assts in the firm and other. Professional skills (auditing) are related to the professional careers and growth in the organization. Professionals skills are special ones that engage the individual in the profession where she/he performs some activities with the assigned job responsibilities. Leadership skill possessed by the individual also plays the dominant roles in setting the strategic goals easily. Leadership skill includes interpersonal skills which play the impressive role for the individual to be known as the successful leader .interpersonal skills included the god attitude and manners .A high regards is given to me by the employees just because of my leadership qualities and interpersonal skills. Thus employees at TaTa motor company can be valuable assts if company properly provides them the necessary training to understand the philosophy and mechanism of auditing techniques. As it will help employees to be more dedicated and committed while performing their responsibilities wholeheartedly. Vast understanding of the subject helps the firm employees to be more result-oriented. Any kind of fraud and misstatement can be assessed by auditors in the financial reports which the firm makes. Thus it is impossible for any firm to make the reliable financial reports without the use of internal control or strong audit system for internal and external financial purposes. The firm will not be in a position to determine the cost of allocation to its resources to its various products line and segment which ensures either profit for the firm in achieving the strategic goals. If the firm is lacking the poor internal financial control, it may not be in a position to reveal the status of its assets and liabilities in the market which would further make its business operation to be failed in producing its best quality of goods and services. So auditing system in any firm ensures in preventing the misstatements in the overall companys records and reports. Therefore internal audit serves the most significant role for many companies in preventing the fraud and it also help the firm to detect the kind of fraud and other kinds of accounting irregularities. In many firms, audit professional help in designing and modifying the internal control system that aims at preventing the firm in meeting fraud and other accounting errors in financial reports. If the firm is famous for its strong and active auditing system in market, it not only saves its employees and reputation but also it retains credibility and trust of its stakeholders. Communication plays the major role in meeting the strategic goals which are set by individuals or organization. Without communication nothing is possible and only source of meeting the organizational goals is to convey the important messages/circular to the staff which can address the new policy regarding the workplace environment is concerned. Communication enable the individual to convey the data to another who perceive it and understand it .Communication is of two types that plays important role to the strategic objectives. Verbal communication and non-verbal communication, verbal communication is expressed in words that are spoken while non-verbal communication is without word but uses the body language or other gestures to express or convey the meanings. For any organization to be most successful in the attainment of the strategic goals, monitoring skills are playing the important role where manager guide their teams to follow the instructions for the completion of the tasks. organizational team members often update themselves with the latest information about the company policies and chalk out the proposed plan which can benefit the organization employees engage themselves in the assessing the working output of the all employees which may increase the efficiency of the organization in better way. The specific tasks assigned by the higher authorities, managers point out to some competent and skills workforce to complete under my supervision. Manger and leaders with the vast decision power at the right time lead the firm effectively. decision about the availability and utilization of all resources must be done on the right ties and if the mangers and leader who are given the power to perform the decision making skills, take the opportunity for the welfare of the firm .decision making power to the mangers can motivate the employees and can lead the company from crisis to prosperity. Manger even use this power for bring the transition in the company. Some leaders and mangers also involve their sub-ordinate in the important decision making skills. The involvement of the employees in the important decision can motivate the employees which show their dedication and commitment and ever bring the most effective results to the company. In evaluating the strategic and auditing skills to meet the organizational objectives, most of the firms use three elements in the skills audit which may prove to be more effective and result-oriented. Following are the skill needed in auditing for the strategic goals. Communication skills: In the execution of the all policies in the working environment, communication along with the strong analytical skills play the dominant role in making the stance on any issue vary durable, employees who possess the analytical skill with strong argumentation can make the situation in favor their organizations. The constant feedback from the external sources about the firms product can arise some heated debate within the organization and managers in the organization with the argumentations skill can change the entire situation on the important decisions. Communication plays the major re in meeting the strategic goals which are set by individual or organization. Without communication nothing is possible and only source of meeting the organizational goals is to convey the important messages/circular to the staff which can address the new policy regarding the workplace environment is concerned. Communication enables the individual to convey the data to another who perceive it and understand it.
Leadership role and skills: Leaders can play effective role in the promotion of the organization values and in the attainment of the strategic goals .Manager with the leadership skill demonstrates and exhibit the courage and dedications. Leadership skills possessed by the individual also play the dominant role in setting the strategic goals easily. Leadership skill includes interpersonal skills which play the impressive role for the individual to be known as the successful leader. Preparation of Audit development: By making the audit development, people in the organization feels motivation and prepares a framework that monitors and evaluate the entire process. So it is necessary for the employees or manger to make certain decision to implement the plan before its development. So manager must understand about the possible issues and problems or they should indentify the tasks for which the plan is to be developed. It helps the individual and managers in the firm to find some solution of the issues which may increase the morale of the employees to perform more in order to attain the organizational strategic goals. These both skills are interrelated with other as self-skill management is considering the part of time management. Individuals and mangers must possess these skills which can bring the positive development in the career growth. When some new tasks are assigned to workforce by the higher authorities, then workforce must manage the time in order to complete the tasks with their own self skills which they have already captured over the period of time , Self- management skill emphases on the use of individual own ideas and options into actions which create positive results to the firm. Individual seeking the higher level of success in their life, must be acquainted with the art of writing, speaking, presentation, communication and leadership skills which can impact on the performance of the organization. The employees performance can also be measured through interpersonal skills and rapport with other in connection with carrying out the organizational goals. All organization tries to develop improvement in all business areas which has fostered commitment of employees to increase the overall efficiency of the organization. my strong collaborations and rapport with the staff have gained lot of trust and confidence which many authors personally believe to be playing the satisfactory role for the prosperity of the firm, therefore it is necessary for the mangers and leaders to develop the interpersonal communication which will provide more opportunities to others and will motivate workforce to contribute more for the achievement of strategic goals. The development of auditing plan for the organization also motivate the employees with the latest ideas and opinion to the most complex issues, enable the employees to participate more for the stability and survival of the organization. Employees can assess their outcome o the basis of their achieved communication skills through simple planning and control. The developments of interpersonal skills also provide the better outcomes to the career growth of employees and to the company particularly. the prosper usage of all means of communication in the organization can increase the efficiency of the employees and produces the open culture where all employees coordinate with each other because of communication. For the monitoring of long term plan, there is a dire need of developing the technical skills which can be fruitful in achieving the goals. When some technical issues arise in the firm than the individual possessing the technical skill can be more dominant over other employees and can increase the worth. Technical knowledge can solve the complicated issues of the organization and employees should possess the technical skills. Recommendations: Organization can use the various financial methods and techniques which can have the positive impact on the companys aggressive profit. So apart from using the finical techniques companies must show their ideal commitment in completing the whole tasks. So all decisions are made keeping in view the exact ratio of the financial(audit) techniques which help to take the better sue of the organizational capital for future perspectives for improving employees performance. When the organization adopts the sound finical decision, it helps the organization to develop the sound strategies towards for suing the accurate capital to the point where it is needed. Organizations must use two approaches in developing the strategic investment audit techniques. One involves the organization to modify the traditional investment framework that is used y the organization and second is sued when the organization thinks to involve the reliance on the analytical framework. Between these approaches, organization focus on the use of strategic cost management, value analysis, R research and development and many other methods. When the organization takes the decision on the basis of audit done, it considers them more appropriate because it includes that entire financial requirement which is required by the firm. Making decision regard to available investment also evaluates that the clear considerations are being taken in the projects. Appropriateness of the financial commitment further save the organization for being driven into dangers and complexities. So strategic decision made after the approval of the budget give the organization to make the positive development in the project which meet all the requirements. Through this approach, organization indentifies the level of additional expenses which can be easily controlled. Post audit appraisal also give the organizations to look at the various aspects that create huge costs and expenses. it makes the organization to be well aware about the losses due to extra expenses to any project or developmental scheme. The basic purpose of the conducting audit is to show the public that how much revenue, assets and obligations the company is generating and giving the dividends to its shareholders accordingly. Organization can also explain in its balance sheet and in its income statement that how the company is perfuming in the market with its available resources. The information contained in the balance sheet and income statement also shows the firms strength in terms of its available capital for the future use. And further improve the efficiency of the firm along with performance of employees. With the industry trends in the market in terms of more competition, organization has also to change its policy for sustaining its position in the market and has to make joint-venture projects. Keeping the credibility among the its stakeholders, management of organization has to look at its annual financial report which in clear terms reflects its comprehensive policy to public. These financial annual reports also depict the wide range of its profitability and shareholders contribution to the company. For gaining the long term goals organization in the competitive environment use the concept of audit management which enhances the power in making the decision about that resource already used which the organization jeeps under its domain .when the organization focus on the profile strategy, it gains the ultimate outcome more quickly. So by keeping the strategic portfolio decisions, organization can get the following improvements which are based on the financial information. It helps the organization to make less relying on the investor in selling the inventory in the average industry to pay its short term debt. So firm must adopt the policy of conducting audit of its product which is not creating more revenue. Thus it must expedite all available resources to consume in the business. Thus there should be revised policy of financial aspect especially of audit. PERS ONAL DEVELOPMENT I a l wa ys h a v e t h e i n t e r e s t i n t h e f i e l d o f ma n a g e me n t wh e n I wa s i n c o l l e g e . Th a t s wh y I c h o o s e ma n a g e me n t s t u d i e s a s ma j o r . Wi t h t h e h e l p o f my t e a c h e r s I e n h a n c e d my k n o wl e d g e i n t h e f i e l d o f ma n a g e me n t . Un d e r t h e s u p e r v i s i o n o f my i n s t r u c t o r s I c o n d u c t a r e s e a r c h wh i c h p r o v i d e me g r e a t u n d e r s t a n d i n g o f ma n a g e me n t . Du r i n g t h i s p e r i o d I e n h a n c e my s k i l l s a n d l e a r n n e w c o n c e p t s a n d t h e o r i e s o f ma n a g e me n t . Th e t o p i c o f t h i s r e s e a r c h i s v e r y i n t e r e s t i n g wh i c h h e l p s me t o p a y my a t t e n t i o n s t o wa r d s my r e s e a r c h wh i c h ma k e a b l e t o s u b mi t my r e s e a r c h o n t i me .
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