What is an Internal Auditing?

What is Internal Auditing

Auditing, in general, is a task that would help you find out whatever’s happening to the information you’re auditing. Out of all the many different types of audits, internal auditing remains to be the most relevant of all – what is internal auditing?

What is an Internal Auditing?

Internal auditing is simply defined as a type of independent audit or assessment that would be particular to a certain company’s governance, accounting processes, operations, internal controls, and the like. It’s far from the usual external audit done by entities and institutions that are licensed and authorized to perform it.

What’s Done in Internal Auditing?

The role of an internal auditor, contrary to popular belief, is something that can’t be done by a regular person. The procedure of internal auditing is complex and would require knowledge of various business aspects such as governance, operations, human resource management, and so on.

Internal auditing has its eyes on business efficiency and effectiveness, all the while helping its people understand how the organization or the company would benefit. During an internal audit, an internal auditor would perform many things that include:

  • Checking and assessing documents
  • Weighing company and organizational risks
  • Assessment of objectives and performance
  • Observation of the strategies being implemented
  • And many more

Phases and Stages of Internal Auditing

Unlike other assessments, internal auditing couldn’t be random. It follows a series of steps that would make it effective in finding out what a company or an organization needs to progress and to be better.

Step 1: Information Gathering

Taking of company information in terms of performance, operations, attrition, etc. These would be the problems that would be answered by the audit.

Step 2: Analysis of Controls and Risks

This step would include the analysis and assessment of the risks of the organization. It includes business decisions, milestones, and possible losses.

Step 3: Assessing of Compliance to Laws and Policies

All companies must abide by federal laws and policies; and this is the step that would detail how the organization is complying with these policies.

Step 4: Verifying of Information

Based on the information gathered, the best and the most tailor-fit suggestions and recommendations would be made, all for the benefit of improvement and development.

Step 5: Suggestions and Insights on Business Improvement 

After the verification of information and the suggestion on development, it will be applied and attempted to see if it will fit well with how the company is performing.

More often than not, internal audits take somewhere between a few weeks, to a few months – even a year. The length will depend on the size of the company, as well as its goals, objectives, and its progressive projections.

If you think that your company needs a bit of tweaking, and you’re not sure where you need to improve, going for an internal audit will be the answer to your problem. There are a lot of companies out in the market that isn’t sure of their performance.

Don’t be the company that straight out makes random changes; have it audited and get the solution that would be fit for what you need.