What is an Internal Audit?
Internal audit is defined by the Institute of Internal Auditors as:
“…an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness or risk management, control and governance processes.”
Why should I have an Internal Audit conducted?
An internal audit is intended to review and evaluate the effectiveness and operation of an organisation’s processes and procedures.
Whereas an external audit is focussed on the financial statements, and internal audit can cover areas of your operations which have little or no impact on the financial statements. More importantly, unlike an external audit where the auditor determines the scope of the engagement, with internal audit, the organisation can direct it towards areas of operational concern.
An internal audit can provide you with assurance that your staff are operating in accordance wtih the organisation’s policies and procedures.
In instances where you do not have formal policies and procedures in place, an internal auditor can assist you in compiling this documentation.
What types of things can Internal Audit cover?
Any aspect of an organisation can be reviewed as part of an internal audit.
Some examples of the types of work which can be conducted in an internal audit include:
Internal audit can also be directed to areas where you might have a concern that there has been a misappropriation of assets or fraudulent reporting.
Internal audits can either be conducted on an on-going basis as part of a long-term internal audit plan, or on a one-off project basis.