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By Lawrence B. Sawyer, JD, CIA, PA and Mortimer A. Dittenhoffer, PLD, CIA Assisted by James H. Scheiner, PhD

Published by The Institute of Internal Auditors, 1,499 pages. $85.00 (IIA members), $100.00 (nonmembers).

Review by Allan M. Rabinowitz, CPA; Professor of Accounting, Pace University; formerly director of internal auditing, Macmillan, Inc.

Over the past half century, internal auditing has emerged as a distinct and full-fledged profession with its own philosophy, standards, principles, practices, and procedures. The extent of its development is impressively evidenced in this 1996 update to a work first published in 1973 by Lawrence Sawyer. Mr. Sawyer has been a prolific and highly regarded contributor to internal audit literature and has played an integral role in the maturation of internal auditing as a profession.

This book has special significance to many in the accounting and managerial communities. It is valuable reading not only for practicing internal auditors but also for all organization managers and executives, including financial personnel, responsible for the presence of sound internal controls in their areas of concern and whose activities are subject to audit; for directors, particularly those serving on audit committees, who need to understand the nature of adequate internal control and the audit function; and for public accountants.

CPAs in public practice who work with smaller clients lacking internal auditors often bear an added burden of seeing that these clients possess a proper operating control structure. Many CPAs are engaged specifically to supply internal audit services. CPAs serving clients who do employ internal audit staffs must know how to derive the greatest benefit from their presence in order to enhance the CPA's work and to minimize their own exposure to client impropriety or error and to audit work omissions.

Included in the book are the Standards for the Professional Practice of Internal Auditing and both the brilliant and concise overview of the work of the profession that was adopted in 1978 and the updated version. Also presented are the Statement of Responsibilities of Internal Auditing and the Code of Ethics for internal auditors.

Chapters are devoted to establishing an internal auditing department in an organization, selecting and developing a qualified audit staff, preparing long-range audit schedules, managing audit projects, and implementing quality assurance procedures. A review of management principles is provided with separate chapters on the subjects of control and risk assessment. Internal auditing processes are covered beginning with preliminary surveys of audit areas and moving on to the design of audit programs, performance of audit field work, development of audit findings, construction of working papers, and preparation of audit reports.

Sampling, analytical, and quantitative procedures are discussed along with the use of computers in the audit process and the audit of computerized systems. Auditing's behavioral aspects are a vital feature of this book which focuses extensively upon auditors' dealings with the persons whose activities they review, executive management, boards of directors, and external auditors. An entire chapter discusses employee and management fraud and the great care auditors must exercise when they suspect its existence.

All in all, this is a useful and readable volume for many a library. *

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