Thanks to the Executive and to Martin, Mike and Roger for bringing the debate into the open. I fear I'm returning to an old argument (which I thought had been long since accepted) regarding the role of internal audit but which now appears to be re-emerging. Here's the crucial sentence from section 3.54 of the report:
" 'the costing method should follow the recommendations in this report, and be
applied consistently, and this compliance should be confirmed at appropriate
intervals by the institution's internal audit service; "
I'm going to interpret this as meaning that an institution's internal audit service should review and comment on the adequacy and effectiveness of the systems established by management for satisfying itself that the costing method is following the recommendations in the report and is being applied consistently.
It is most unfortunate that the wording in the report gives the impression that the internal audit service has the primary responsibility for monitoring compliance with the methodology. This, of course, would be quite wrong. It is a management function.
Francis
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