Internal Audit

Internal auditing is a critical function within an organization

Internal Audit

Internal auditing is a critical function within an organization that goes beyond simply checking the books. Here’s a breakdown of that phrase to explain its key aspects.

Independent and Objective

  • Independent: Internal auditors function with a degree of autonomy from management. They report to a high enough level within the organization (often the audit committee of the board of directors) to ensure they can objectively evaluate company activities without pressure to sugarcoat findings.
  • Objective: Internal auditors base their assessments on facts, evidence, and established standards. They avoid bias and personal opinions when evaluating processes, controls, and risks.

Assurance and Consulting

  • Assurance: Internal audits provide assurance to management and the board of directors about the effectiveness of internal controls, risk management practices, and overall governance. This assurance helps build trust in the reliability of financial reporting and operational processes.
  • Consulting: Internal auditors don't just identify issues; they also act as consultants. They analyze their findings and recommend improvements to strengthen controls, streamline processes, and mitigate risks. This consultative approach helps management take action and enhance the organization's overall performance.