Industry-specific regulatory requirements<\/li>\n<\/ul>\nThese criteria should be revisited periodically as businesses may find themselves falling into the mandatory compliance framework because of increased growth in their operations or financial performance.<\/p>\n
Which business should consider internal audits?<\/b><\/strong><\/p>\nFor an organisation that may not be legally required to do internal audits, it can be very beneficial to do them anyway.<\/p>\n
Regular internal audits are more useful for companies that are growing quickly, have multiple locations, have high volume financial transactions or are in highly regulated industries.<\/p>\n
Knowing the applicability of internal audits enables management to decide whether or not to establish an internal audit function is best practice or statutory requirement.<\/p>\n
<\/span>Benefits beyond Compliance<\/b><\/strong><\/span><\/h3>\nAn internal audit is often a first step for organisations in order to comply with regulations but is soon realised as having strategic benefits.<\/p>\n
An effective internal audit assists organisations to:<\/p>\n
\n- Strengthen internal controls<\/li>\n
- Improve operational efficiency<\/li>\n
- Detect process weaknesses<\/li>\n
- Minimise the threat of fraud.<\/li>\n
- Ensure regulatory compliance<\/li>\n
- Provide more accurate financial reporting<\/li>\n
- Specifically support the improvement of corporate governance.<\/li>\n<\/ul>\n
These benefits help strengthen the organization’s performance and confidence of the stakeholders.<\/p>\n
It is essential to review internal audit applicability regularly.<\/p>\n
Things change in the business world all the time. The applicability of internal audit in a company may change due to expansion, merger, borrowing or turnover.<\/p>\n
There should be ongoing compliance with both financial thresholds and regulatory changes, which should be reviewed regularly by management. Delaying implementation of audit requirements can create unnecessary compliance risks.<\/p>\n
Collaborating with experts also supports organisations to come to a proper understanding of evolving laws and regulations, and to set up a sound audit plan.<\/p>\n