Internal audit: the concept and its role in corporate activities

mysterious phrase "internal audit" actually hides a tool of enormous power and incredible opportunities.It not only improves the efficiency of any business, but also increases the number of competitive advantages.Internal audit executives are increasingly implementing their own businesses.It includes as a magic wand that can correct the situation and send the profits to the mountain.

About this management discipline spoke only at the beginning of the third millennium, though, she began to develop even after the Second World War.With what is connected as the growing interest?

  • As mentioned above, internal audit, although for a long time and has not been appreciated, but in skilled hands able to repeatedly increase the impact of your business.
  • Remember the series of scandals that swept the country in recent years, Western Europe and the United States, and related corporate policies?This is the most graphic evidence of the fact that because of failures in the system of external audits, even the big firms are not immune from bankruptcy.
  • well-planned management in the most positive sense of attracting the attention of investors, so that, in their eyes the activities of your company becomes more efficient.

In modern Russian realities of these factors added into the bargain a few others.Among them is the desire to streamline the organization of the business process, and the potential financial savings, and an undeniable benefit to the owners of companies, the waste from the business and handed over all affairs of qualified managers.

What is internal audit?

One of the definitions of an independent international institute of internal auditors, it is an objective activity, providing a comprehensive guarantee of perfection.In every sphere of internal audit aims rigorous order to achieve its objectives by using a systematic approach, while enhancing the effectiveness of controls on the production, as well as corporate governance in general.

Let's look at some of the characteristics that determine the details.

Objectivity - one of the essential qualities of any internal auditor.It must be impartial in all its estimates and judgments.

Improvement - suggests that any internal audit aims to not designate existing mismanagement, punish those responsible to the fullest extent, and writing about this multi-page reports, namely to increase the effectiveness of the business processes and enterprise systems.

Guarantees - on a par with advisory support, every customer receives their internal audit.Today, this area also includes internal controls, a multi-purpose risk management, the implementation of corporate work and some other activities.

need or no internal audit of the company?The decision was taken by the owner or senior management.And the feasibility of its designated in each case individually.From myself note: the company managers, supervising all aspects of the business, and who do not see necessity in internal audit, over time it may be mistaken illusion of total control.However, in practice it often happens that physically guiding force themselves no longer able to fully cover all the activities of the company.That in such cases, the internal quality audit may be an opportune moment.Just not too late?