UNIVERSITY OF ALBERTA

							                               UNIVERSITY OF ALBERTA

                           INTERNAL AUDIT ACTIVITY CHARTER

Purpose

Internal Audit Services is to provide an independent, objective assurance and
consulting service designed to add value and improve University operations. It
assists the University accomplish its objectives by employing a systematic,
disciplined approach to evaluate and improve the effectiveness of risk management,
control, and governance processes.

Internal Audit Services is also responsible for coordinating examinations of
suspected fraudulent or irregular activities that are reported to the University.


Scope

The scope of work of internal audit activities includes all University units and
operations and is to determine whether risk management, control (including
computerized information controls and security), and governance processes, as
designed and represented by management, are adequate and functioning in a
manner to help ensure that:

   Risks are appropriately identified and managed.
   Significant financial, managerial, and operating information is accurate, reliable,
    and timely.
   Activities are in compliance with policies, procedures, standards, and applicable
    laws and regulations.
   Resources are acquired economically, used efficiently, and adequately protected.
   Strategic plans, programs, and objectives are achieved.
   Quality and continuous improvement are fostered in the University’s control
    processes.


Organization

The Associate Vice-President (Audit & Analysis) and University Auditor reports
functionally to the Chair of the Board Audit Committee and administratively to the
President or designate. Note: Effective February 13, 2003 the Vice-President
(Finance and Administration) is the President’s designate.

The direction and scope of the internal audit function is under the authority of the
Associate Vice-President (Audit & Analysis) and University Auditor. As the Associate


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Vice-President (Audit & Analysis) and University Auditor also provides oversight for
the Strategic Analysis office and performs administrative functions related to that
office as well as other initiatives as determined by the Provost and Vice-President
(Academic) and the Vice-President (Finance & Administration), the Senior Manager,
Internal Audit Services will also have a direct reporting relationship to the Chair of
the Board Audit Committee to support the organizational independence of the
internal audit function.

Reporting an oversight of the function is outlined in the Board Audit Committee
terms of reference.

Responsibility

In support of Audit Committee oversight of internal audit, the Associate Vice-
President (Audit & Analysis) and University Auditor will:
   Develop a risk-based plan, and submit it annually to the Board Audit Committee
    for review and approval.
   Implement the audit plan, as approved, including, as appropriate, any special
    tasks or projects requested by management and/or the Board Audit Committee.
   Ensure any significant changes to the audit plan are brought forward to the Board
    Audit Committee for review and approval.
   Maintain a professional audit staff with sufficient knowledge, skills, experience,
    and professional certifications to meet the requirements of this charter.
   Manage contracted resources, as necessary, to assist in the delivery of internal
    audit services.
   Establish a quality assurance program over the operations of Internal Audit
    Services to ensure work is conducted with due professional care.
   Measure the performance of Internal Audit Services against pre-determined
    goals and applicable standards.
   Keep the Board Audit Committee informed of emerging trends and successful
    practices in internal auditing.
   Perform consulting and advisory services related to governance, risk
    management, and control as appropriate for the organization and with the
    approval of the Board Audit Committee.
   Track progress with respect to the implementation of audit recommendations and
    report progress to the Board Audit Committee.
   Coordinate audit work with the Office of the Auditor General, and other audit
    groups as appropriate.
   Coordinate the investigation of suspected fraud and irregularities within the
    University and notify management and the Board Audit Committee of the results,
    in accordance with the appropriate University policies.


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   Provide a summary of all reported incidents of suspected fraud or irregularity and
    the disposition of each incident.
   Disclose instances of any difficulties encountered in the course of the work,
    including any restrictions on the scope of the audit work or access to required
    information.
   Report significant findings related to the University processes of risk
    management, control, and governance.
   Review this charter regularly, in consultation with the Board Audit Committee,
    and update it as required.


Independence

Without the approval of the Board Audit Committee, Internal Audit Services’ staff are
not authorized to:

   Perform any operational duties for the University.
   Initiate or approve accounting transactions external to Internal Audit Services.
   Direct the activities of any University employee outside of Internal Audit Services,
    except to the extent such employees have been appropriately assigned to assist
    Internal Audit Services.

The Associate Vice-President (Audit & Analysis) and University Auditor will not
jeopardize the independence of the function by permitting an auditor or a contracted
party to perform assurance work in areas where that individual provided advisory
services for, or was an employee of, that area within the past year.
Annually, all internal audit staff will sign a supplementary Internal Audit Code of
Conduct.

Two functions will be housed with internal audit: Quality Management in Clinical
Research and the Safe Disclosure & Human Rights Office. The latter includes intake
for human rights and equity related issues as well as concerns under the Ethical
Conduct and Safe Disclosure Policy. In addition, the Associate Vice-President (Audit
& Analysis) and University Auditor is responsible for the Strategic Analysis Office. The
Associate Vice-President (Audit & Analysis) and University Auditor will remove herself
from oversight of any audits of processes that involve the areas of responsibility noted.

Should audit be required of these areas, appropriate mechanisms will be proposed to
ensure audit independence.

Authority

The Associate Vice-President (Audit & Analysis) and University Auditor, the Senior
Manager, Internal Audit and Internal Audit Services staff are authorized to:

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   Have unrestricted access to all functions, records, property, and personnel.
   Have access to the Board Audit Committee and the President.
   Have access to meetings related to risk management, control, and governance
    processes.
   Allocate resources, determine the scope of work, and apply the professional
    techniques required to accomplish audit objectives.
   Obtain the necessary assistance of personnel in units of the University, as well
    as other specialized services from within or outside the University.


Standards of Audit Practice

Internal audit activity will govern itself by adhering to the International Standards for
the Professional Practice of Internal Auditing of the Institute of Internal Auditors and
the Institute of Internal Auditors’ “Code of Ethics”.


Confidentiality of Engagement Records

The Associate Vice-President (Audit & Analysis) and University Auditor will control
access to engagement records. The Associate Vice-President (Audit & Analysis)
and University Auditor or the Senior Manager, Internal Audit Services will consult
with senior administration and/or legal counsel prior to releasing engagement
records to external parties. The University’s independent auditor, the Office of the
Auditor General of Alberta, is provided copies of internal audit plans and reports.


Related documents:
Board Audit Committee Terms of Reference
Fraud and Irregularity Policy & Fraud and Irregularity Reporting Procedure
Ethical Conduct and Safe Disclosure Policy




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