An internal auditing is an independent, objective, assurance and consulting activity, designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
Just as it sounds, this type of control is designed to detect any errors that may have occurred. With this analysis, you can discover discrepancies in your financial reports. This type of control identifies problems that already exist. In fact, when an audit is performed, it is an example of a detective control. So, lets say your manufacturing business is going to audit payroll reports to look for any discrepancies. This is a type of detective control.
In this audit, you found a discrepancy in the payroll report and now you need to prevent a recurrence of this error. You have noticed that one of your payroll employees continually has typing errors that result in employees being paid an incorrect amount. Now you need to speak with the payroll associate to address this problem and perhaps provide additional training to prevent future discrepancies. You have now performed a corrective control. You have made a plan to correct these errors that result in employees being paid incorrect amounts.
After you have performed your audit and corrected the current discrepancies, you can now put controls in place to prevent future errors. With preventative controls you are now designing controls to help prevent errors from occurring in the future. Perhaps you have decided that you will now require this payroll associate to require an approval on the payroll report before submitting it until there are no more discrepancies with payroll. You are segregating duties, requiring a different employee to authorize and record transactions.
Objectives of internal audit
The objectives of each audit may be different. An objective is a desired goal or condition for that specific event. This is a list of common internal audit control objectives.
We have a professional duty to provide an unbiased and objective view. As auditors, we remain independent from the operations we evaluate and report to the highest level in an organization, the senior managers and the governors, i.e. the board of directors or the board of trustees, the accounting officer or the audit committee.
Our internal audit services are designed to be right-sized to meet the needs of your organization, whether you need assistance for your existing internal audit function, or a turn-key solution
We understand that internal auditing can be an invaluable asset that reveals the true underlying causes of both strengths and weaknesses. With this crucial insight, companies can overhaul or modify operations to strengthen and streamline internal control procedures and safeguard assets. Additionally, we don’t just offer one-time audits, but rather long-term risk management solutions that work today and in the future. This approach allows clients to adjust their processes as they continue to grow.
Our Internal audit procedure include: