Internal auditing is an autonomous, objective assurance and consulting activity intended to add value and improve an organization’s operations. It helps an organization accomplish its objectives by conveying a systematic, meticulous approach to assess then improve the effectiveness of risk management, control, and governance processes.
The Role of internal auditors in a firm.
Auditors provide a professional and unbiased and objective vision of an organization’s operations. They evaluate and report to the highest level in an organization i.e. senior managers and governors. The nature of internal auditing, its role within the organization, and the requirements for professional practice are contained within the International Professional Practices Framework(IPPF)
What is the value of internal auditors to an organization
For the prosperity and survival of an organization, internal audit function is fundamental because it looks beyond the financial risks and statements to consider wider issues such as the organization’s reputation, growth, its impact on the environment, and the way it treats its employees.
How to achieve an efficient audit in an organization.
1. Assess organizations Control processes and regulatory compliance
Internal auditors ensure that all business procedures in the firm have controls that ensure the systematic and effective flow of all operations. They also ensure that the firm adheres to laid down laws and policies. Laws especially in regards to statutory compliance and also if the operations are in line with the existing company’s policies.
2. Risk management procedures and governance.
The internal audit profession’s fundamental concern is evaluating an organization’s management of risk. Three main risks can impact operations:
- Risks to clients,
- Risks to employees and stakeholders and
- Risks to organizational continuity.
To evaluate how well these risks are being managed the internal auditor will assess the quality of risk management processes, systems of internal control, and corporate governance processes, across all parts of an organization and report this directly and independently to the most senior level of executive management and the board’s audit committee
3. Improves efficiency of operations
Through understanding the business and its objectives, internal auditors assess the efficiency and effectiveness of operations and the protection of assets. The four steps internal auditors apply throughout an organization in collaboration with other stakeholders to create and sustain value through operational efficiencies include:
- Address customer needs and expectations
- Evaluate and improve human capital requirements
- Provide a platform to execute consistently and deliver sustained profitability
- Continuously identify and mitigate evolving risks
- Create a culture of operational efficiency and continuous improvement
4. Implementation of monitoring procedures.
This is to ensure that all checks, policies, and controls in the organization are in place and that they are being implemented effectively, and whether the said policies are aligned with current market trends.
5. Advising on changing market paradigms.
Internal auditors are tasked with providing guidelines especially on instances of checking market trends, digital transformations, and the redefined workplaces. Internal auditors provide valuable advice on the sequential implementation of changes to ensure a positive impact on both the business and staff.
While these five steps are not the totality of internal audit’s role in helping in the organization’s survival and prosperity, they provide a solid roadmap for internal audit to collaborate with management without compromising its independence and create value for the organization along the way.