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Processes of Internal Audit

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:
  • Determine timing, purpose and scope with therefore each area or process to be audited.
  • Complete relevant planning for the audit
  • Execute actual internal audit work, including evaluation of process and control design, as well as testing methods to determine effectiveness of operating control
  • Reporting prepare a report or other appropriate communication in response to the work done.
  • Follow-up on reported findings at appropriate intervals.

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Benefits of Internal Audit

  • Scope of Internal Audit.

    Management or the governing board of a Company defines the scope of an internal audit where they may consider special areas of interest.

  • Report

    The internal audit reports are mostly directed to the management or the governing board.

  • Improves the Control Environment

    Internal audit provides the company with analyses, appraisals, recommendations, counsel and information concerning the activities reviewed.

  • Gives Early Warning

    Internal audit signals' early warnings to the management thus, enabling deficiencies to be identified and be worked on at an early stage. Internal auditA assists management with detecting and prioritizing areas or processes that need attention and audit focus.

  • Increases Accountability

    Internal audit verifies that management meets their responsibility through the risk assessment and audit process. It provides unbiased objective assessments of whether public resources are managed responsibly and effectively to achieve intended results.

  • Oversight

    It helps management and other decision makers by evaluating whether the organization is doing what it is supposed to do, spending funds for the intended purpose, and complying with laws and regulations.

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More About Internal Audit

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:

    • All significant functions have appropriate segregation of duties among different personnel to reduce risk of error or fraudulent activities. No one person has control over all aspects of any financial transaction
    • Transactions are authorized by a person delegated approval authority and the transactions are consistent with organization’s business objectives, policies and procedures
    • Accounting records are routinely reviewed and reconciled, by someone other than the preparer and that transactions have been properly processed
    • Fixed assets, inventories, cash and other property are secured physically, counted periodically, and compared with item descriptions shown on control records
    • Employees are provided appropriate training and guidance to ensure they have the knowledge necessary to carry out their job duties, and are aware of proper channel and procedures to report suspected fraudulent activities
    • Policies and procedures are documented and are accessible to employees. The documented policies and procedures provide day-to-day guidance to relevant employees and continuation of duties in the event of prolonged employee absences or turnover
    • Management maintain effective monitoring controls to review operations and assess whether results are consistent with established objectives and goals as planned for the organization.

    Conclusion: The management would 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.

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