The Importance of Internal Audit

Internal audit is a dynamic profession involved in helping organizations achieve their objectives. It is concerned with evaluating and improving the effectiveness of risk management, control and governance processes in an organization. To do this, internal auditors work with management to systematically review systems and operations. These reviews (audits) are aimed at identifying how well risks are managed including whether the right processes are in place, and whether agreed procedures are being adhered to. Audits can also identify areas where efficiencies or innovations might be made. Internal audits are organized under an ongoing program of review and advisory activity that is based on the strategic needs of an organization.
In the course of their role, internal auditors work across all areas of an organization. In addition to core areas of financial control and IT, they review the tangible aspects of operations, such as an organization’s supply chain or IT systems; as well as more intangible aspects such as organizational culture and ethics. In fact, any system that has an impact on the effective operation of an organization may be included in internal audit’s scope. Accelerating change has characterized the business landscape for many years and can be expected to continue. New competitors, technologies, and financial instruments; changing cost structures and regulations; increasingly integrated global economies; and other developments are creating new risks and opportunities for organizations to consider. As these developments evolve, the importance of internal audit’s influence as an independent advisor to management will increasingly be more noticeable.
Corporate governance has been under a strong and critical public spotlight in recent years. The community’s expectations of boards and senior management, and of those charged with providing an independent review of a company’s operations and financial accounts, have been raised. To meet those