The Value of Internal Audit for Your Organization

It’s official! Now is the time to think about internal audit and how it can benefit your business. On May 19th, Miami-Dade County issued a proclamation extending the international recognition of May as Internal Audit Awareness Month to the local level.

Internal audit is often misunderstood, but there is a lot of value in this important function. As the incoming president of the local chapter of the Institute of Internal Audit (IIA), I would like to shed some light on the ways that an internal audit may be able to help your business.

So what’s so great about internal audit, anyway?  

An internal audit can help an organization meet its goals and objectives. Internal auditors can play a variety of roles, such as educating management and the board regarding critical issues; monitoring compliance with laws and regulation; and evaluating whether policies and procedures are being followed; as well as making recommendations for how the organization can improve operations, reduce costs, enhance revenues or improve profits.

3 ways your business can benefit

There are three main ways an internal audit works to help an organization: assurance, insight, and objectivity.

1. Assurance – Internal auditing assists an organization to obtain assurance on the organization’s governance, risk management and control processes to help the organization achieve its strategic, operational, financial, and compliance objectives. Management and governing bodies may rely on an internal audit to evaluate if the organization is operating how management intends and if policies and procedures are being appropriately followed. This process can provide valuable feedback on the effectiveness of controls to mitigate significant risks.

2. Insight – As a catalyst for improving your organization’s effectiveness and efficiency, an internal audit can provide insight and recommendations based on analyses and assessments of data and business processes. Many internal audit professionals bring a broad range of backgrounds that can serve in a variety of capacities. These skills can help your business to identify risks and determine appropriate solutions. Furthermore, due to their responsibility to analyze a vast span of activities across the entire organization and to gain an in-depth understanding of each activity, internal auditors are often uniquely suited to provide advice to management on how issues in one department will affect another.

3. Objectivity – An internal auditor can offer your management team or board an objective source of independent advice. IIA Standards and Code of Ethics require a high level of professional objectivity in gathering, evaluating, and communicating information about the processes that are examined in an internal audit.

The value of an internal audit can be derived from saving money, or monitoring compliance to avoid fines, or increasing productivity, or even protecting your company’s reputation. Through assurance, insight, and objectivity, internal auditing can assist with all of these things – the combination of which can be invaluable to your organization’s success.