Audit Scope refers to the activities covered by an internal audit. Audit scope includes, where appropriate:

1. Audit Objectives
2. Nature and extent of auditing procedures performed
3. Time period audited
4. Related activities not audited in order to delineate the boundaries of the audit.

Auditable Activities consist of those subjects, units, or systems which are capable of being defined and evaluated. Auditable activities may include:

1. Policies, procedures, and practices.
2. Cost centres, profit centres, and investment centres.
3. General ledger account balances.
4. Information systems (manual and computerized.)
5. Major contracts and programs.
6. Organizational units such as product or service lines.
7. Functions such as information technology, purchasing, marketing, production, finance, accounting, and human resources.
8. Transaction systems for activities such as revenues, collection, procurement, disbursement, inventory and cost accounting, production, treasury, payroll, and capital assets.
9. Financial statements.
10. Laws and regulations.

Charter of Business Systems and Control is a formal written document which defines the section's purpose, authority and responsibility. The charter should:

1. establish the section's position within the organization
2. authorize access to records, personnel, and physical properties relevant to the performance of an audit or review
3. define the scope of activities for Business Systems and Control.

Compliance refers to the ability to reasonably ensure conformity and adherence to organization policies, plans, procedures, laws, regulations, and contracts.

Conflict of Interest refers to any relationship which is or appears to be not in the best interest of the organization. (See policy) A conflict of interest would prejudice an individual's ability to carry out their duties and responsibilities objectively.

Findings are pertinent statement of facts. They emerge by a process of comparing what should be with what is.

Independence allows internal auditors to carry out their work freely and objectively. This concept requires that internal auditors be independent of the activities they audit. Independence is achieved through organizational status and objectivity.

Management Consulting
The rendering of independent advice and assistance about the process of management to clients with management responsibilities.

Management Consultant
An individual who provides independent advice and assistance about the process of management to clients with management responsibilities.

Objectivity is an independent mental attitude which requires internal auditors to perform audits in such a manner that they have an honest belief in their work product and that no significant quality compromises are made. Objectivity requires internal auditors not to subordinate their judgment on audit matters to that of others.

Outside Service Provider refers to a person or firm, independent of the organization, who has special knowledge, skill, and experience in a particular discipline.

Risk is the probability that an event or action may adversely affect the organization or activity under audit.

Risk Assessment is a systematic process for assessing and integrating professional judgements about probable adverse conditions and/or events. The risk assessment process should provide a means of organizing and integrating professional judgments for development of the audit work schedule.

Risk Factors are the criteria used to identify the relative significance of, and likelihood that, conditions and/or events may occur that could adversely affect the organization.

Scope Limitations is a restriction placed upon the internal auditing department that precludes the department from accomplishing its objectives and plans. Among other things, a scope limitation may restrict the:

1. Scope defined in the charter.
2. Access to records, personnel, and physical properties relevant to the performance of audits.
3. Approved work schedule.
4. Performance of necessary auditing procedures.
5. Approved staffing plan and financial budget.

Significant is the level of importance or magnitude assigned to an item, event, information, or problem by the internal auditor.