Why An Internal Audit Is Important?
Internal audit is important in any information security and compliance program. It is a valuable tool for effectively and appropriately managing risk. It helps assess if the company is doing what it says. Internal audit helps show if there are gaps in a business’s policies and procedures. It helps show areas for improvement and helps management see if they are meeting their compliance goals. These matters are addressed through internal audits.
What is an Internal Audit?
The purpose or role of an internal audit is to provide independent assurance that an organisation’s risk management, internal control processes, and governance are operating effectively. An internal audit is done in an objective manner and is designed or made to improve or develop and help an organisation’s business practices mature.
They help offer insight into the organisation’s policies, procedures, cultures and aids management and board oversight by verification of internal controls like operating effectiveness, mitigation control of risks, and compliance with relevant laws and regulations.
Reasons Why Internal Audit Is Important
Internal audits are critical for assuring and monitoring business assets and that they are properly or well secured and safeguarded or protected from threats. They are important in verifying that business processes reflect the documented policies and procedures of the organisation.
Here are more reasons why internal audits are important:
Internal Audits Provide Objective Insight
It is true that you cannot audit your own or personal work without a conflict of interest. The internal auditor or an audit team, cannot have operational responsibility to achieve this objective insight. For small companies that do not have extra or additional resources to devote or dedicated to this, it is acceptable or all right to cross-train or coach employees from various departments to audit other departments. By giving an independent and unbiased view, the internal audit function can add value to the organisation.
Internal Audits Improve The Efficiency Of Operations
An objective review of an organisation’s policies and procedures can assure you that you are doing what the policies and procedures say. And that these processes are enough to mitigate unique risks. Continuous monitoring and review of processes can help identify control recommendations to improve the effectiveness and efficiency of these processes. It also allows the organisation to be dependent on the process, than people.
Internal Audits Evaluate Risks and Protects Assets
Internal audit programs assist stakeholders and management in identifying and prioritising risks through systematic risk assessments. Risk assessments help identify gaps in the environment and permit remediation plans to take place. Internal audit programs help in tracking and documenting changes that have been made to a working or business environment and ensures business in the mitigation of any risks found.
Internal Audit Assesses and Evaluates Controls
It helps improve the control environment of an organisation by assessing its operating effectiveness and efficiency. It helps answer the question if the controls are fulfilling their purpose and if they are adequate or enough to mitigate risks.
Internal Audits Ensure Compliance with Laws and Regulations
Regular performance of an internal audit can ensure compliance with relevant laws and regulations. It can also offer peace of mind to a business owner and that you are prepared for a compliance audit services professional. Gaining the trust of your clients and avoiding costly fines related to non-compliance with set laws makes it an important and worthy activity for your business or organisation.
Internal audit is a very important activity that every business should carry out if they want to keep their controls aligned with the governing laws and regulations. It is also important because it helps keep the business owners updated on what is actually going on with it. It also helps a lot in gaining the trust of clients, lenders and investors by making the business more credible. These are a must for any kind of business if you want to gain and keep the trust of your clients, lenders, and investors. It is one of the ways to earn their trust and one way to have an objective insight into the business’s policies, procedures, and controls and keep them updated if these are working effectively and efficiently for the organisation. Keep clients and business managers updated about the business with regular internal audits of your business.
Kingston Knight Audit are the Auditor Melbourne experts to contact when dealing with your trust account audit, SMSF Audit, financial statement audit, and internal audit requirements. Contact us today, Kingston & Knight Audit offers a free telephone consultation to establish how we can best help you achieve the assurance and compliance you require.
Call our Melbourne team today on 03 9088 2242, or email us via audit@kingstonknightaudit.com.au.
