Thriving organizations can suffer rapid and significant reputational damage when the mistakes of their leaders are made public.
Today, many continue to think that internal audits should be limited to assurances in risk management and internal control. However, internal auditing consulting services can help an organization to achieve its goals by using a systematic and consistent approach to assess and improve the effectiveness of risk management, control, and corporate governance processes.
When to do the internal audit?
Internal audits should be done regularly. Every company has signs that help identify the exact moment to perform this type of service. See below: –
- Financial problems: a company that has a lot of debt; high revenue, but no money left.
- Problems in human resources: companies that suffer from a high rate of absenteeism and turnover.
- Problems in achieving goals: companies that have difficulty setting real goals and where processes are not adequate.
The audit has several steps. It is important to do good planning, dedicate a period of your day to do processes, and create checklists, among other issues. That is why it is required to do under the supervision of experts in the subject.
Organizations have already begun to realize the importance of internal auditing in their processes and, therefore, the number of auditing and accounting firms has grown in India in recent years.
The audit carried out by specialists aims to create an action plan to make various businesses create processes and achieve their goals.
The importance of audit, internal control, and risk management for the best practices of corporate governance
New risks arise with new types of corporate structures and changes in information technology. Many controls over information and assets are compromised or even eliminated as a result of reengineering, outsourcing, and downsizing of organizational levels.
There are different types of risks, with different characteristics depending on the business environment in which the company operates.
Therefore, each type of company has a different universe of risks. In the new emerging business context, virtual organizations, with their outsourced production and distribution processes, present specific but manageable risks related to customer satisfaction, technological evolution, and cost control.
To analyze, map, and, above all, make decisions in terms of prioritization and allocation of resources for monitoring and risk assessment, it is recommended that there is a strong integration of the internal audit, internal control, and risk management areas.
Internal audit, internal controls, and risk management are integral parts of corporate management and ensure the processes defined by senior management.
It is worth mentioning that knowing the internal procedures of an organization; its processes, its customers, its suppliers, and its collaborators is more than an obligation, it is a matter of necessity and organizational security.
Internal controls and risk management need periodic reviews, as human and systems failures, operational negligence, errors, and fraud can happen at any time.
The application of best practices in internal auditing, internal controls, and risk management as effective and efficient management tools can minimize losses.
This content is meant for information only and should not be considered as advice, legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
Posted by
CA Aman Aggarwal
AKGVG & Associates