Process for Internal Audit

Process for Internal Audit

The time duration for completing an internal audit would depend on the audit objectives and scope.
Prior to starting the internal audit process, the internal auditor obtains an understanding of the domain to be audited and decides on the scope and objective of the internal audit.
The internal auditor executes the audit plan. He or she would gather data, test systems and verify information to complete the internal audit plan.
Based on the data and information gathered in the internal audit, the Auditor prepares an internal audit report and discusses improvements with the Management.

Internal Audit

Internal audit is a type of consulting engagement and an objective assessment of an Enterprise's operations. Internal audit can be conducted to assess the strengths and weakness of financial, operational and information technology systems. Having regular internal audits can help a business improve governance, reduce risks, obtain insights and develop good management systems. Having a good internal audit team committed to independence, integrity and accountability, would serve as an excellent source of advice for the Management team.

Internal Auditors unlike Statutory Auditors do not have any statutory or legal responsibilities. Hence, internal Auditors have the liberty to consider issues beyond their scope of audit and can help an organization with its growth. Hence, a good internal audit not only provides assurance, but also consulting to help the business improve or mitigate weakness.

Benefits of Internal Audit

  • An internal audit can help provide an independent and objective opinion about the operations of a business. Hence, internal audits serve as a management tool for good governance.
  • Internal audits provide early warning to the Management on deficiencies or loopholes in the business. Thus, internal audits can help prevent costly mistakes or frauds in the business.
  • Having a strong internal audit mechanism with surprise check will help improve accountability of the employees and ensure that systems and processes are followed properly.
  • An effective internal audit is one of the best tool for creating effective internal control systems. Regular internal audits help a business develop good internal controls.

FAQS

Internal audit is an independent, objective assurance and consulting activity designed to add value and improve a business's operations. Internal audit helps business have a systematic and disciplined approach to risk management and control.

Though it is not mandatory to have mandatory internal audits, having sound internal controls can help a business do better. Hence, having occasional internal audits can help a business.

Internal audits can help you improve the effectiveness and efficiency of your business by bringing in sound governance. An internal auditor also serves as an important Advisor to the Management on improving operations.

Internal auditors are an integral of a business and provide ongoing monitoring and assessment of all activities. Statutory auditors on the other hand are independent of the business, and provide an opinion on the financial statements.

No, internal audit reports will not be published or disclosed to any other party other than the business.

The time taken to complete an internal audit would depend on the nature and scope of the areas to be audited. In addition, the size of the business and nature of activity also plays a factor in determining the time taken. Most internal audits on a small business can be completed in 7 - 14 working days.

The details required to complete an internal audit would depend on the nature and scope of the audit. Prior to beginning the internal audit engagement, the Expert would provide a detailed information / data / document request.

The cost for completing an internal audit would depend on the nature and scope of the areas to be audited. In addition, the size of the business and nature of activity also plays a factor in the cost.