Internal Audit

 Internal audit is generally management course of action for organization. It can be voluntary and mandatory. Voluntary is management promoted. as such can be taken as measure to curb mis happening or false practice in an organization

Internal audit is organization management perspective facilitating an independent team to evaluate an organisation’s internal controls, its corporate practices, processes, and methods. An internal audit helps in securing compliance with the various laws applicable to an organisation whether the applicable industry compliance is met or not and been followed or not as per benchmark. 

The purpose of an internal audit is to check the effectiveness and operational standards framed by an organisation. An organisation may have a set of rules for operations, such as placing orders, accepting deliveries, and making payments. An internal audit also helps in knowing whether the employees follow the internal operational standards.

An internal audit helps in identifying problems or inefficiencies and taking necessary corrective steps. Internal audits can identify any frauds by employees, such as embezzlement of funds. The audit can also identify whether there are deliberate cost overruns, whether a particular vendor is getting preference over other low-cost suppliers.

There may be a need to identify employee rotation between different roles and functions. An internal audit can check any potential threats or financial losses. An organisation can plug in financial leakage. The process enables the identification and correction of a lapse in procedures before the statutory audit.

An internal audit can be on an annual basis or monthly or quarterly in fact frequency is management perspective. The choice depends on the need of the organisation based on its volume and complexity of organization function. In certain cases, a company should mandatorily appoint an internal auditor, such as under the Companies Act, 2013. There are different types of assessment or analysis techniques an internal auditor may adopt for performing an internal audit.

An internal audit can ensure that an organisation can secure timely compliance with law and regulations. The audit provides a degree of safety and helps manage risk emerging from fraud, abuse of power, or any other scenarios. An internal auditor provides the management with their objective assessment of the processes and accounts. The management can improve their operational and financial performance using the services of an internal auditor.