Internal audits are a great quality management tool for evaluating and improving your business-critical processes. They clarify what’s working well and what needs improvement.
1. Put the IIA Standards First
The IIA’s International Standards for the professional practice of Internal Auditing serve as the foundation of the profession, and following this mandatory guidance is because it is the most important thing internal auditors can do to add value.
Mr. Chambers “IIA President and CEO” states:
“Conformance with internal audit standards has a direct impact on the effectiveness and stature of every internal audit department.”
Without Adding to the standards, we would be unable to add value to an organization. So, the tip is to Focus internally, strengthen your Audit and practices and you’ll be well-positioned to serve others.
2. Understand the business
In order to add value and to contribute something positive to the organization, you must have a keen understanding of its objectives, operations, strategies, as well as the industry in which the organization operates. It is important to know the collective strengths and weaknesses to help take action. So, As to sink our strategies with our operational goals and to achieve the set targets our audit agenda & audit plan should check and observe comprehensive with overall operational goals.
3. Assess risks
Assessing the organization\’s risks successfully is fundamental to the job of internal auditing because it must follow those risks along with aiming at how to assess them from a broad perspective. When identifying the parts that threaten to disrupt or impede the organization from achieving its goals, and to work on assessing the adequacy of risk management, organizational governance, and culture. There must be a clear understanding of the board\’s appetite for risk and evaluate whether executive management is operating within those bounds.
4. Testing during Audit procedures
Internal audit control testing is an activity with the ultimate goal of improving organizational operations, financial reporting, and compliance by evaluating the efficiency of the internal control system. Each testing method helps the auditor issue a well-informed opinion, based on evidence. Further, it provides the auditor with the information needed to provide conclusions, whether the business is operating optimally, and managing risks properly.
There are five testing methods that auditors can use:
5. Reviewing and Reporting
An internal control review typically tests whether the internal controls are working as designed. Evaluating internal controls involves:
1. Identifying the internal control objectives relevant to the organization.
2. Review the applicable policies and procedures and the documentation standards for each of them.
3. Discuss the internal controls with the appropriate stakeholders.
4. Observing the control environment.
5. Testing transactions as appropriate.
6. Sharing findings, concerns, and recommendations with senior management and/or the board of directors.
7. Determining that the organization has taken corrective action on identified vulnerabilities in a timely manner.