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Role of Internal Audit
6-30-2015
The Institute of Internal Auditors (IIA) defines Internal Auditing as:
“An independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. The internal audit activity 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.”
The role of Internal Audit in helping boards with their governance responsibilities has been growing in importance and influence in recent years in Canada and internationally. At a time of global economic uncertainty and heightened geo-political sensitivities, charities and NGOs as well as major corporate and public sector organizations have increasingly been relying on their Internal Audit functions to help identify risks, improve the management of manage control systems and underpin operational performance.
Internal Audit’s remit is a wide-ranging one: it provides Boards with assurance on an organization’s risk management effectiveness, internal controls and governance processes. In essence that means Internal Auditors help organizations to manage the wide range of risks facing them before they become a problem, including for example: corruption and fraud risks; security risks; health and safety risks; and risks related to non-compliance with regulation.
Internal Audit’s role as a vital check and balance to an organization’s operations and governance has arguably never been greater. Charities and NGOs today face a wide range of strategic and operational risks. Failure to anticipate and manage these correctly could be hugely damaging – not least to the good reputation on which all such organizations rely. The unique perspective, the critical insight and oversight that Internal Audit provides, are vital weapons in a Board’s armory to defend against risk and help their organizations get to achieve their goals.
There is a legitimate role for quality audits in today’s workplace. The success of the audit depends on management’s guidance of the audit, selection and training of auditors, and willingness to involve people in achieving the opportunities for improvement identified by the audit. To be effective, the audit process must be properly managed. A successful audit process is part of an overall plan for continuous improvement and can become a vehicle for recognizing excellence in an organization.
Footnotes: Footnotes: This column is presented as a general source of information only and is not intended as a solicitation for business. It is always recommended that you consult a qualified tax professional beforeembarking on any of the suggestions outlined above. Mohammed Yasin, CGA, is the principal of M. Yasin & Co. Inc., Certified General Accountants and has offices in Vancouver & Surrey,B.C. For more information on this topic or any other taxation matters, please contact taxes@alameen.ca.
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