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Internal auditing is an independent, unprejudiced assurance and consulting activity that is purposed to add value and enhance an organization's operations. It helps an organization to achieve its goals by putting up a systematic, controlled approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Internal audit can single out control problems and try to correct errors before they are realized during an external audit.
Through commitment to truthfulness and accountability, internal auditing imparts value to board members and senior management as an objective source of independent advice. Internal auditing is initially targeted at evaluating internal control. External auditors may consider and use the work of internal auditors in connection with their integrated audit of a company’s financial statements.
A company forms an internal audit function within the Company or engage a third party independent service provider to conduct an internal audit. Management completes the risk assessment process and develops an internal audit plan that is responsive to the risk assessment.
Then the process follows as below:
Management or the governing board of a Company defines the scope of an internal audit where they may consider special areas of interest.
The internal audit reports are mostly directed to the management or the governing board.
Internal audit provides the company with analyses, appraisals, recommendations, counsel and information concerning the activities reviewed.
At times you may need a trained outside professional to evaluate your organization’s operations to determine if appropriate controls are in place to ensure proper handling of resources and to protect your organization from fraudulent activities. We assess client’s internal controls to determine the efficiency and effectiveness of their operating procedures. Then we share best practices and make recommendations that help client organization become stronger and more profitable by correcting any inefficient or ineffective operating procedures we may find.
In general, we ensure:
Conclusion: The management would be more effective and successful by having an internal audit function supporting it with its risk assessment process and ensuring that the responsibility for maintaining a system of internal control has been achieved.