Internal Audit (What it is, Characteristics and Objectives)

  • Jul 26, 2021
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The audit is a term that is used to refer to the information gathering processes, generally of an accounting nature to know if the activities are being carried out as agreed by the laws.

The internal audit It is a type of audit that aims to collect information from the control systems of any company and thus evaluate and ensure that the activities are carried out as described in the manuals internal This information allows the management of the company to make the necessary adjustments in the different departments.

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internal audit

In this article you will find:

Characteristics of an internal audit

There are certain parameters that define a internal audit that guarantee that said process of the expected results.

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  • It is essential that those who run the company or financial entity agree on a tentative date within which this process could be completed. These dates can be several during the year.
  • The audit must be carried out with the rigor demanded by said process and the environment during it must be one of professionalism. In this, the role of the auditor appointed to it will be vital.
  • Planning such as the date, is another characteristic that defines this process, making lists and enumerating the different problems will mean the success of an internal audit.
  • Finally, the communication must be clear regarding the corrective measures to be taken, for which a meeting is held where the weaknesses and areas in which they should be improved will be revealed.

What is an internal audit for?

In any company or business it is necessary to keep a rigorous control over each area of ​​action, commercial, administrative, etc. That is why, according to the law, a series of data and information must be collected and maintained depending on the area in which the activity of your company is carried out, so the data records can be compared under specific standards.

Each of the control systems within each company are auditable at any of its levels, which is why there must be an information database in order to be able to compare updated data so that financial or administrative business management is constantly controlled and make decisions in order to obtain results positive

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What is the objective of the internal audit?

Every company needs to comply with an organization that allows it to achieve objectives, in this way to be more competitive in the market systematizing its own management model through the collection of information that allows it to study and improve management plans, control and risk

Within each company the internal audit must be a objective and independent task, verification and consultation, specifically designed to increase the positive results of a given management

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To get with the objectives of the internal audit needed:

  • Adapt an environment of control and data collection
  • Strictly comply with the objectives, procedures, regulations and laws
  • Use resources efficiently and without waste
  • Certify that the accounting contents are stable and reliable.
  • Protect accumulated assets.
  • Support the company to be successful in what it plans and help it better manage responsibilities and risks.
  • Observe the evaluations of the functions of internal operations.
  • Discover the financial and operational problems that may arise, to know how to face and solve them.

What is an auditor?

It is the experienced professional who designates a company or authority to carry out an investigation of the management or work of a company. It is worth noting that its original meaning is related to listening or hearing.

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Difference between internal and external audit

The external audit also known as legal audit consists of analyzing the annual balance of the accounts of a a certain company, as in the internal audit, this process is carried out by a professional, in this case the auditor external.

The internal audits They are usually carried out by the company's employees themselves and their results are sent to the management or to those who are responsible for the team to carry out the necessary corrections.

Other types of audit

There are others types of audits that allow an analysis or evaluation of certain processes such as the case of the operational audit, through which it is sought to know How efficiently does a given company increase its efficiency in the different activities it involves during a given period of time? I developed.

  • Systems audit: Also known as spatial audit, it is characterized and different from other audits by not being focused or directed to financial evaluations, such as in the case of program audits or software.
  • Forensic audit: Investigations carried out by police forces to clarify facts are called in this way criminals and is carried out by teams of experts in the field, which may include medical experts in criminology.
  • Forest Audit: This process is carried out to determine the course of action that will reduce the environmental impact of a company on nature, it is carried out by companies that exploit natural resources such as companies oil companies.

In the business world there are many companies that even today perceive negatively a process of internal audit, this being an opportunity to strengthen and improve different areas of the activity business.

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