The term “internal audit” has grown in use in business today. Many large businesses and organizations like to develop their internal audit services and divisions while training their staff. It is important to determine whether an internal audit will report to the audit committee of the board of directors or directly to the board of directors of the company before conducting one.
The latter alternative provides for more effective use of the internal audit system’s capabilities due to the increased level of internal auditor independence from senior management. If this choice is not practical, the internal audit division must report to the company’s CEO.
What Is The Value Of Internal Audit?
Many people think that an internal audit identifies a company’s strengths and flaws as its lifeblood, and can help it function and survive in a competitive market.
Let’s expand on that!
An internal audit is the best tool for spotting opportunities to increase activity efficiency because it gives you access to the data you need to accomplish your objectives and address any issues head-on.
It should be noted that while an efficient internal audit can lower the costs of an external audit (an external auditor can use the results of an internal audit, reducing the volume of audit procedures of an external auditor), it cannot eliminate the necessity for an enterprise to conduct an external audit.
As a result, an internal audit is a completely impartial advisory activity that offers tangible outcomes aimed at boosting the worth and performance of the organization.
The Role of Internal Audit
In conclusion, we can state that the function of internal audit is essentially limited to:
- Evaluate the management’s performance.
- This contributes to the improvement of the internal control system by generating suggestions for improvement.
- is a reliable source of information that is objective and works to enhance the management system.
- It ensures that the internal control system is working properly, that employees are following rules and procedures, and that management is given accurate information.
- Assets are protected; risks are evaluated and appropriate measures to manage them are determined, and the tasks facing the organization are completed.
- It has a problem-solving focus.
- is committed to giving advice.
Conclusion
It is quite simple to assess data and get a sense of what is happening right now thanks to modern technologies. Internal auditing includes not only observation but also evaluation of how well procedures are operating and calculation of variances. It should be noted that an internal audit generally aims to increase the effectiveness of the business as a whole. The stakeholders’ confidence in the company’s transparent operations, prudent use of resources, protection of assets, and management of business risks are increased by the presence of top audit firms in Delhi.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
Posted by
CA Aman Aggarwal
AKGVG & Associates
