“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.
”Internal Audit is assurance of true picture of state of affairs of an entity. It is checking within the entity. It helps in ensuring optimum utilization of the resources of the entity.
Internal audit is not compulsory, but a company can conduct it to review the operational activities of the firm or an organization. In this type of auditing, the entity’s management determines the work area. It also does critical appraisal of internal controls and helps in implementing the best industry practices to meet corporate objectives. It identifies threat and opportunities and designs controls to manage the risks and taking advantage of opportunities.
Objectives of Internal Audit
Benefits of Internal Audit
- Establish sound corporate governance and use of best industry practices.
- To ensure authenticity and reliability of data generated.
- Increases the Operational Efficiency
- Ensures Compliance with Corporate Laws and Regulations.
- To Increase trust of outsiders on the organization.
Functions of Internal Auditor
- Review of an organization’s operations, policies, and procedures.
- Evaluate the efficacy of risk management procedures that are currently in place.
- Examining and evaluating continuous effectiveness of the internal control system and making recommendations, if any, for improving internal control mechanism.
- Help the management in identifying frauds and preventing them.
- Ensure that the organization is complying with relevant laws and statutes.