Internal audit is an independent, objective activity of providing recommendations and consulting services, which should benefit the organization and improve its activities. An Internal Audit Consulting Firm helps the organization achieve its goals through a systematic, streamlined approach to assessing and improving the processes of risk management, control, and corporate governance.
The key function of internal audit is to provide the company’s management with information on whether the company’s risk management, control, and governance processes are effectively organized and how these processes could be further developed.
Top Audit Firms in India evaluate the effectiveness and efficiency of the above processes. The scope of internal audit is very wide, so the successful performance of the task requires familiarization with the company’s operations and processes.
Is the internal audit of a company mandatory? What should it contain?
From a legal point of view, the internal audit is mandatory only for the businesses that have the annual financial situation subject to the external audit, thus requiring an objective analysis to evaluate all the activities of the entity in question. (Read More: The Importance Of Accounting Services For Decision Making)
Although internal audit is not mandatory for any business, it is beneficial in many ways, so it is often recommended for institutions that are not required to have it. This verification, in its final report, contains an objective retrospective on the activity, the organization, and the financial plan.
Therefore, it is the basis of any plan to build the future of the company. It must include a wide range of analyses, studies, and observations, without neglecting any aspect of the business. Among the most important points to be mentioned and detailed are:
- General information for indexing the company in the official register (registered office, unique code of the institution, etc.);
- The current financial situation of the company;
- The size, scope, and area of application of the audit;
- Special aspects that the manager wants to be included in the report, communicating this to the auditor from the beginning, so that the analysis is complete and for a sufficiently long period to reflect the objective reality;
- Opinion of the person performing the entire internal audit:
- Recommendations regarding the initial objectives of the analysis, but also some that appeared later, are related to them;
- Objective reporting of the situations that the company has in question, whether the final results are positive or negative;
What are the benefits of conducting an internal audit within a company?
The internal audit of a company is beneficial because it helps to objectively highlight the situation in which an institution is, making a detailed general assessment, on all its levels, from the relationship between management and employees, between colleagues, to how to organize the actions undertaken, to report to customers and the financial status of the company.
This complex process of analysis must be done by a person who can remain objective throughout the evaluation so that the results reflect reality. Otherwise, the aspects that are harmful to the company cannot be corrected, and future projects and decisions will be made based on erroneous information, which does not provide a solid basis for development
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