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Internal auditing means a self-governing, objective assurance and consulting activity designed to add value and improve an organization’s operations.
The companies have mandated such class of companies to appoint an internal auditor. The appointment shall be made by the provisions Companies Act.
Internal auditors work varied from the function to function. Below are some key areas of auditing:
The internal auditor shall evaluate an organization’s management of risk. All organization faces various risks; the auditor shall analyze the same. Since the success of any organization depends on how they manage those risks effectively. The auditor shall assess the risk management processes, systems of internal control and corporate governance processes, across an organization.
The internal auditor helps management in improving organization practice. If a manager is concerned about a particular area of responsibility, the internal auditor can help to identify improvements.
The range of internal audit’s role in evaluating the management of risk is wide since from the mailroom to the boardroom is involved in internal control. The internal auditor role is to evaluate the risk at one level to report on the effectiveness of the implementation of management policies at another.
The Management shall identify all risks affects the organizations’ growth which in return helps an internal auditor anticipate possible future concerns and opportunities providing assurance, advice, and insight where it is most needed.
Accomplishing objectives and managing valuable organizational resources requires systems, processes, and people. Internal auditors work closely with line managers to review operations then report their findings.
Providing a guarantee to executive management and the board’s audit committee that risks are being managed effectively is not the exclusive domain of internal audit. There are likely to be other assurance providers who perform a similar role.
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