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Internal auditing programs are critical to monitoring and ensuring that all of your business assets are properly protected and protected from threats. It is also important to verify that your business processes reflect your documented policies and procedures
Let’s look at five reasons why internal audits are important and why their purpose is to keep your organization in compliance with general frameworks and regulations.
1. Provides objective insight
2. Improve operation efficiency
3. Assesses risk and protects assets
4. Assess organizational controls
5. Ensures legal compliance
Provides objective insight
You cannot audit your own work without a specific conflict of interest.
Your internal auditor, or internal audit team, may have no operational responsibility to gain this objective insight. In situations where smaller companies do not have the additional resources to devote to this, it is acceptable to cross-train employees in different departments to be able to audit other departments. By providing an independent and unbiased perspective, the internal audit function adds value to your organization.
Improves operational efficiency
By objectively reviewing your organization’s policies and procedures, you can ensure that you are doing what your policies and procedures say you are and that these processes are adequate to mitigate your unique risks.
By continuously monitoring and reviewing your processes, you can identify control recommendations to improve the efficiency and effectiveness of these processes. Instead, allow your organization to rely on processes instead of people.
Assesses risk and protects assets
An internal audit program assists management and stakeholders in identifying and prioritizing risks through a systematic risk assessment. A risk assessment can help identify any gaps in the environment and allow for a remediation plan.
Your internal audit program will help you track and document any changes you make to your environment and ensure any risks are mitigated.
Control assessment
Internal audit is beneficial because it improves the organization’s control environment by assessing efficiency and operating effectiveness. Are your controls serving their purpose? Are they enough to reduce risk?
Ensures compliance with laws and regulations
By conducting an internal audit regularly, you can ensure compliance with any and all relevant laws and regulations while also giving you peace of mind that you are ready for your next external audit. Gaining client trust and avoiding costly penalties associated with non-compliance makes internal auditing an important and worthwhile activity for your organization.
