Internal audit is the best tool for identifying opportunities to enhance the efficiency of activities, allowing you to get the information necessary to realize the goals and solve the issues facing the subject within the simplest way. It should be noted that a good internal audit can reduce the costs of an enterprise for external audit (an external auditor can use the results of an internal audit, this may reduce the number of audit procedures of an external auditor) but cannot eliminate the requirement for an external audit for an enterprise.
Thus, internal audit is an independent and objective advisory activity that has concrete results aimed toward increasing the worth and improving the company’s performance. Many believe that internal audit determines the strengths and weaknesses of an organization, is that the lifeblood of a corporation and contains the potential that permits a corporation to function and survive during a market environment.
COMPANY AUDIT UNDER NEW RISK SCENARIOS
In the last decade, there has been a growing number of legislative and self-regulatory interventions, just like the need of turning to audit consulting services, which are geared toward improving the effectiveness of the internal controls of the corporate entity, and thereby strengthening the mechanisms, in order to protect and shield its investors. On the opposite hand, the expectation of stakeholders that the governance and processes of the bodies liable for control adhere to recognized standards and leading reference practices is growing.
It is commonly seen, that the need for significant evolvement of the internal audit, in order to represent and communicate to stakeholders and constantly increasing and hence, the value which the risk management and control system produce, shouldn't be underestimated. Such a communication shall be considered as a distinctive as well as a qualifying element for one’s mandate, rather than mere as a fulfilment of regulatory compliance.
ROLE OF INTERNAL AUDIT
- Assess the effectiveness of management.
- Contributes to the development of the internal system by developing recommendations for improvement.
- Is an objective source of information; aimed toward improving the management system.
- Provides assurances that the internal control system is effective, employees befits the principles and procedures, management receives reliable information, assets are protected, risks are assessed and measures to manage them are determined, the tasks facing the organization are completed.
- Is focused on solving problems.
- Is focused on providing advice.
In general, it is noted that internal audit is aimed toward improving the efficiency of the corporate as a whole. The presence of top audit firms in Delhi increases the confidence of stakeholders, increases their confidence within the rational use of resources by the corporate, safeguarding assets, optimizing business risks, and transparency of the corporate.
Modern technology makes it relatively easy to interpret data and see a picture of what's happening here and now. Internal audit acts as a tool to identify as well as assess the efficiency and affective of the processes in terms of their working, and also calculate deviations, for better results.
NEED FOR INTERNAL AUDIT
Internal audit strives to add value to organizations valuation; however, it is seen that stakeholders, board of directors as well as the top management, expects something more than that. The answer to the present call is proving difficult, considering what proportion and the way organizations have changed within the last decade: business structures have become more and more complex, also large data has resulted in more disruptive results, the fraudulent activities are on an exceedingly high level, and hence, the customers, investors, and as well as the regulators undertake overall analysis of the companies very carefully.
The consulted best audit firm in India should promote the quality and innovation through standards clearly defined, fostering a culture that rewards innovation and continuous improvement, yet as ensuring quality and alignment of the audit plan with the risk profile and also the organization changes (Quality & Innovation).
Internal Audit is expected to be multifunctional, thereby maintaining the autonomy and clear lines of reporting in the corporate entity. In this regard, the audit plan should be geared toward promptly anticipating needs and changes within the reference context (Service Culture).
Data analytics must be done, mainly in respect of risk profiles and business understanding. The tools used for such an analysis, should be geared towards greater understanding and assessment of risks and also helping in identifying the anomalies, if any.
The Internal Audit should optimize costs through the adoption of a good methodology for audit, supported standardized and streamlined processes to maximise efficiency while optimizing costs (cost optimization).
The auditing services in India should ensure alignment to business through proper strategic planning of its activities and coordination with the opposite “lines of defence”, appropriately considering the expectations of stakeholders in its mission and defining the worth it can give to a company (business alignment). These aspects force us to rethink how Internal Audit activities are dispensed, especially considering the changing context within which they're carried out.
Thus, a need arises to adapt faster to the dynamic environment and not just cope up with the pace of change. During this regard, a revolution is important, instead of an evolution, which mixes talent, technology, and innovation.