subject: Fruitful Audit Is Outcome Of Intact Planning And Constructive Involvement Of Organization [print this page] Internal audit is an independent process carried out to assess the competence and efficiency of risk identification and management in the spheres of business operations, accuracy of financial statements, protection of assets and compliance to the legal obligations. The internal auditors in an organization also evaluate other portions for instance ethical values adhered by the business concern, performance management, communicating risk and the adequacy of internal controls. They assist in developing a good corporate governance process within the company. Their role also includes providing suggestions with reference to the improvement in the performance of the organization.
On one hand, management is in charge of channelizing internal controls. On the other hand, internal audit services is responsible for ensuring to the management that internal controls are productive and operating as desired. The activity of internal audit is looked after by Chief Audit Executive (CAE). CAE prepares a written statement demonstrating the independent approach of internal audit task and the activities performed in this process. This statement is to be authorized by the audit committee.
The effective conduct of the internal audit procedure proves to be an asset for the management and the board of directors of an entity. It can make the corporate governance system, risk management operations and internal controls of an organization commendable. It also assures the shareholders, employees, finances and other stakeholders about the proper manner of accomplishing business activities. The auditing process is carried out in four steps-Planning, Fieldwork, Audit Report and Follow-up Review. In the planning stage of audit, the auditor informs the client about the audit, discussions are held with the management regarding the scope and goals of the evaluation, required information is collected, present internal controls are examined and the further procedure is planned. The next phase of fieldwork involves determining whether the existing controls examined in the previous stage are working effectively or not and communicating the findings to the clients. In the step of audit report, the conclusions gathered in the fieldwork step are summarized in the audit report. This report also includes recommendations regarding the improvement. Before issuing the final report, a rough draft is prepared and sent to the clients so as to consider the opinions of the clients related to it. After about a year of submitting the audit report, a follow-up review is conducted by internal auditors in which an examination of the undertaken steps suggested for improvement is done and notified to the clients.
The audit process is the combined efforts of the team of provider of internal auditing services and the management of the organization. Thus, an audit will yield positive results only if client gets involved in this process and help the auditors London in the best possible way.
