Assuming that you are running a successful company, I am sure that as the owner/management of the company you must have established standardized systems and processes to control your business operations. You must also be spending a good amount of time monitoring and reviewing the activities of your employees and ensuring that they are following the processes and systems that would lead to achievement of your company’s objectives.
Need A Helping Hand?
Now, how would you like to have an extra pair of eyes and ears that can help you with this monitoring? Someone who periodically reviews your operations (core departments and as well as support functions) and reports the deviations, its risk impact, its root causes and recommendations to improve them.
Internal Audit: The Solution
Let me introduce you to Internal Audit
If you have Internal Audit in place and it keeps delivering you the desired results in form of continuous improvement in processes, it would become a competitive advantage over your competitors. Because a competitor can copy your products or can hire similar employees, but it is not easy to copy a culture where you strive for continuous improvement.
Having an extra pair of eyes and ears in the form of internal audit will also give you the advantage and scalability to grow. Because when someone else is doing your job of monitoring and reporting (independently), you can focus your time and energy on growth of your company.
Benefit of Internal Audit
Companies of all sizes have benefited from internal audit. Even well established and successful companies get ongoing value addition through the recommendations made by internal auditors. See how companies use continuous audit technology.
Our Approach to Internal Audit
We follow a very structured approach to the internal audit exercise. Our step-by-step process to conduct internal audit:
- Gain understanding of Company’s objectives, risks, policies, processes, controls & systems
- Finalize and prioritize audit areas with management and prepare annual plan of audits
- Understand processes and systems of the areas to be audited
- Frame Risk Control Matrix keeping in mind the objectives, risk profile and policies of the Company
- Conduct comprehensive reviews to ascertain effectiveness of internal controls, identify process inefficiency and risk exposure
- Identify root cause of the exception and recommend feasible and practical corrective measures
- Report the audit observations, risks, root cause and recommendations to the management
- Conduct follow-up reviews to verify implementation of the recommendations
- Report control effectiveness scores, key issues and implementation status to the Audit Committee
As Peter Drucker points out – “what gets measured, gets improved”. Internal Audit is an effective tool to measure employee performance as a part of the performance management exercise done for your employees, which in turn help improve their performance.
(The author is an expert in setting up Systems and Processes and deploying management tools that help companies grow to the next level.)