How to create a strong internal audit structure for your firm in 2022?
The success of a business depends on both internal and external factors. Internal factors up to an extent can be controlled by the firm by conducting required procedures and analyzing the firm’s activities which may include assessing the payroll system, functioning of various departments, and well-being of the workers and employees, etc. Conducting an internal and external audit is the best way to evaluate all the departments and their functions. Preparing a strong internal audit structure will ensure that all the systems of the firm are put in the proper place and are efficient enough to meet the goals of the firm.
Internal Audit for Business
An internal audit is a process through which the firms can assess their operations and internal control procedures and ensure whether they are effective or not. An internal audit is a proactive approach that gives assurance regarding the firm’s governance and internal control strategies along with risk management plans.
A strong internal audit structure of a firm will assist the firm to face strong competition and ensure if it is moving on the right path and it will guide to achieve the expected results without any hindrances. Below are some of the best internal audit practices which can be applied for a strong audit structure:
Have a better clear reporting structure
The reporting structure of the firms must evidently try to maintain and provide transparency of the operations to the internal audit team. If a clear reporting structure is not maintained then it will cause hindrances in the communication flow and it will negatively impact the efforts of the internal audit team.
Also, read, When Should a Firm Conduct an Internal Audit?
Develop intra-company relationships and build trusts
Before conducting the internal audit all the interested parties and the stakeholder like CEO, CFO, managing directors, and other entities must hold a meeting and make clear the expectations of the audit and they must ensure whether they all are on the same page of the firm i.e., there must be a sync in the activities of such entities. The team leaders or the firm leaders must be consulted to get an idea of the present picture of the firm and their expectations regarding the firm in future years. Transparency must be maintained by the audit team also and they must work hand in hand with the departments and staff and they must try to evaluate whether the expectation of the department heads or the leaders are met or not. In short, there must be a mutual understanding and trust between the audit team and various departments of the firm.
Business strategies and assessment of risks
The internal audit must try to understand the overall business strategy of the firm before starting the audit. A risk management report must be drafted by the audit team after studying the past audit reports and feedbacks so that when the internal audit is conducted as per the risk management report all the bottleneck areas can be identified and results will be reported accordingly.
You might also want to know, why risk management services is important for businesses?
Have a positive attitude and a strong commitment
Compliments and appreciations must be given to the firm and the departments when their efforts bring positive results in achieving the audit goals. Their contribution must be recognized and they must be dealt with a positive attitude which will give birth to a sense of belongingness in the minds of staff and the employees. The audit team must focus on the growth of the firm and they must fulfill their commitments without any flaws.
Provide training to the internal audit team
The audit team must be provided with adequate training so that they can meet the respected audit standards and it will also provide a value-added opportunity to the firms with regards to sound management systems.
Focus on high-risk operations
In order to ensure effective business operations for the long term, the internal audit team must focus on high-risk operations, which is always the best course of action.
Adoption of Data Analytics
Integration of data analytics with internal audit processes will result in a more effective and strong internal audit structure. Due to the efficient, clean, and organized data provided by the data analytics, it becomes easy for the audit team to have more specific insights. It will enable the audit team to acquire required information in a simplified manner which can be used to detect any discrepancies.
Know Why Data Analytics is Important for Internal Audit?
CDA Accounting and Bookkeeping Services LLC with its experienced team provides auditing and accounting services to domestic as well as overseas companies. Being one of the leading accounting and auditing firms in Dubai, CDA is known for providing custom-tailored services to our clients. Our accounting and auditing professionals can guide the clients to form a strong internal audit structure and help them conduct audits in a perfect manner. For more details feel free to contact our experts.