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Internal Audits - Benefits
7-14-2015
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
There is theoretically no restriction on what internal auditors can evaluate and report about within an organization. But, internal audit projects tend to vary from one organization to another, reflecting particular objectives of owners, directors, and senior management. Internal auditors typically operate under a board-approved charter that defines their role, objectives, and scope. The following five directives from the IIA's Statement of Responsibilities of Internal Auditing are included in most charters:
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Review the reliability and integrity of financial and operating information and the means used to identify, measure, classify, and report such information;
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Review the systems established to ensure compliance with those policies, plans, procedures, laws, regulations, and contracts which could have a significant impact on operations and reports, and determine whether the organization is in compliance;
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Review the means of safeguarding assets and, as appropriate, verify the existence of such assets;
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Appraise the economy and efficiency with which resources are employed; and,
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Review operations or programs to ascertain whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as planned.
The benefits of an audit:
The benefits of an audit are numerous. Audits can improve an organization's efficiency and profitability by helping the management better understand their own working and financial systems. The management, as well as stakeholders, suppliers and donorss, are also assured that the risks in their organisation are well-studied, and effective systems are in place to handle them.
· Analyse and understand your organiztion's financial records.
· Identify key areas for improvement in your organization.
· Assess risks, economy, efficiency and quality.
· Evaluate new technology.
· Uncover fraudulent or other illegal activities within your organization.
· Reinforce and strengthen internal control.
Auditors have a unique broad perspective of an organization which they apply to deliver effective analyses and relevant information. Management can use this information to evaluate the organization and implement measures necessary to meet their objectives.
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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