Internal Auditing, according to the Institute of Internal Auditors (IIA), can be defined as an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. The internal audit activity helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
In other words, internal audit provides an independent and unbiased assessment of the operations of the organization. It renders information to the management regarding the management of risk effectively. It acts as a catalyst for improvement in government processes. Being an advisor, it tells management of the organization what it needs to know and at what time. Thus, it has become very vital for the success of any organization to conduct internal audits.
There are various types of audits conducted by the organizations to achieve particular objectives. Operational Audit, Program Audit, Fraud Audit, Ethical business practices Audit, Compliance Audit, Control self-assessment Audit, Financial audit, Stock & Cash Audit, Health & Safety Audit, Food & Quality Control Audit, Trade License Audit are some of the internal audits.
Internal auditor is an organization’s critical friend. A friend who can challenge current practice, champion best practice and act as a catalyst for improvement. Following are the certain activities performed by the internal auditor in order to help organization accomplish its strategic objectives.
- Internal auditor evaluates controls and give advises to managers at all levels. He assesses the tone and risk management culture of the organization at one level and reports on the effective implementation of policies at another level.
- Internal auditor identifies key activities and relevant risk factors associated with them. The ways in which an internal auditor assesses the risks are hugely impacted by changing trends and economic conditions.
- The techniques of internal auditinghave changed from a reactive and controlbased form to a more proactive and risk basedapproach. This enables the internal auditorto anticipate possible future concerns andopportunities as well as identifying current issues.
- Internal auditor should be well-versed with the strategic objectives of the organization to have a clear comprehension of how the operations of an organization fit into a bigger picture.
- Internal auditor reviews compliance to ensure that whether a certain organization is adhering to rules, regulations, code of ethics, laws, guidelines and practices or not.
WeMark is a leading company which conducts around 1.5 lakhs audits every year.