04 November 2017 0 Comments Posted By : Administrator

Tips for Internal Audits in Large Businesses

Just the term “internal audits,” can bring anxiety for employees and business executives alike. Internal audits are detailed, sometimes time-consuming and they can uncover things that you don’t necessarily want to see, such as fraud.

Despite the challenges of internal audits, they can be incredibly beneficial to businesses. They can help eliminate not just fraud, but also inefficiency, and they can identify places where money can be saved, and operations can be improved.

For example, you may discover that either fraud or errors are occurring in accounts payable and it’s time to improve your bottom line and eliminate fraud through the implementation of AP automation.This is something you might not otherwise do, without a comprehensive audit.

The following are some tips and areas to focus on for Canadian businesses.

Internal vs. External Auditing

It’s good to ensure that everyone in your organization is clear on what will be audited, and a big point of distinction lies between internal and external auditing.

An external auditor is going to be looking at things like financial statements, but an internal auditor can be a much more flexible role. There are many areas an internal auditor can focus on, and the primary objective is to identify anything that’s critical to success.

Cybersecurity

One of the primary areas of focus in an internal audit for a lot of companies is on cybersecurity. Cybersecurity continues to evolve and grow, and it’s one of the biggest threats a lot of Canadian businesses face, so these audits should be done quite often.

A cybersecurity audit of technology and systems should probably be done at least a couple of times a year, because of how quickly this area can change and shift.

Reviewing Systems

While every internal audit is going to be somewhat unique, and it may change based on the department being looked at, some key objectives should be assessed.

First, there needs to be a review of whether or not systems are compliant. This can include looking at what’s required for both internal and external compliance. Is the department following outlined internal guidelines, and are they meeting governmental and regulatory standards?

Once compliance is assessed, the audit can move on to review the effectiveness of particular systems. For example, are there areas where automation could be implemented to improve effectiveness and efficiency? Are things being done as quickly as they could be?

During this phase of the audit, things that should be looked at include whether or not there are bottlenecks, redundancies that are unnecessary, or places where errors are being made.

Finally, another key part of an internal audit should be setting baselines for measuring success in the future. A good audit needs to identify not only where changes are needed and where inefficiencies, fraud or other issues exist, but there needs to be a standard that can be used to measure how future changes represent an improvement. If there’s no way to determine success, the internal audit doesn’t have much value.

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