5 reasons why internal audit is vital

06 Sep, 2019 - 00:09 0 Views

eBusiness Weekly

Internal audit programmes are critical for monitoring and assuring that all of your business assets have been properly secured and safeguarded from threats. It is also important for verifying that your business processes reflect your documented policies and procedures. Here are 5 reasons that internal audit is important:

  1. Provides objective insight

You can’t audit your own work without having a definite conflict of interest. Your internal auditor, or internal audit team, cannot have any operational responsibility to achieve this objective insight. In situations where smaller companies don’t have extra resources to devote to this, it’s acceptable to cross-train employees in different departments to be able to audit another department. By providing an independent and unbiased view, the internal audit function adds value to your organisation.

  1. Improves efficiency

of operations

By objectively reviewing your organisation’s policies and procedures, you can receive assurance that you are doing what your policies and procedures say you are doing, and that these processes are adequate in mitigating your unique risks. By continuously monitoring and reviewing your processes, you can identify control recommendations to improve the efficiency and effectiveness of these processes. In turn, allowing your organisation to be dependent on process, rather than people.

  1. Evaluates risks and

protects assets

An internal audit programme assists management and stakeholders by identifying and prioritising risks through a systematic risk assessment. A risk assessment can help to identify any gaps in the environment and allow for a remediation plan to take place. Your internal audit program will help you to track and document any changes that have been made to your environment and ensure the mitigation of any found risks.

  1. Assesses controls

Internal audit is beneficial because it improves the control environment of the organisation by assessing efficiency and operating effectiveness. Are your controls fulfilling their purpose? Are they adequate in mitigating risk?

  1. Ensure compliance with

laws and regulations

By regularly performing an internal audit, you can ensure compliance with any and all relevant laws and regulations. It can also help provide you with peace of mind that you are prepared for you next external audit. Gaining client trust and avoiding costly fines associated with non-compliance makes internal audit an important and worthwhile activity for your organisation.

Still have questions about developing your own internal audit program? Contact us today in the form below and let’s start building your internal audit programme. —  kirkpatrickprice.com.

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