What Is Internal Auditing?
Internal auditing is an objective assurance and consulting activity designed to add value and improve a company’s operations. It assists the company accomplish its goals & objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
Internal auditing is a process designed to improve an organization’s operations. Performed by our team of professionals and certified internal auditors with in-depth knowledge of the business, systems, and processes, it helps an organization meet its predetermined objectives and goals.
The process of the internal audit is broken down into the 3 following steps:
Planning
The audit process begins with planning the audit. During this first phase, the audit team will evaluate/perform the following:
- Distribute Audit Notification.
- Conduct Pre-Audit Meeting.
- Interview Department Personnel.
- Review Policies and Procedures.
- Understand and Document the Business Processes.
- Perform Risk Assessment.
- Prepare a Detailed Audit Program.
- Prepare audit budget (in hours).
- Select items to be Audited (samples, not 100%).
Fieldwork
The second phase of the audit is called fieldwork. During this phase, the audit team will physically be on site at the audit client’s location performing the audit. The following are some of the procedures generally performed during fieldwork.
- Review Supporting Documentation.
- Interview department personnel.
- Perform analysis.
- Identify Exceptions.
- Identify Recommendations for Improvement.
- Prepare Written Audit Comments (i.e., findings).
- Department Provides Written Response and Corrective Action Plan for findings.
Reporting
The third phase of the audit is reporting. During this phase, the auditor in charge will prepare the written audit report which summarizes and communicates the audit results.
- Issue a draft report.
- Discuss draft report with unit management.
- Issue final report.
- Report is factual, clear, concise, and appropriate tone.
- Report distribution:
- President.
- Executive Vice President.
- External Auditors.
- Chief Financial Officer.
- Controller.
- Audit Subcommittee.
- Division Vice President or Senior Vice President.
- Department Head.
What Are the Advantages of Internal Auditing?
Increases the Operational Efficiency
An internal audit reviews your organization’s policies and procedures periodically. These processes help mitigate your business risk, while the continuous monitoring and review will allow you to identify ways of improving the effectiveness of business processes.
Evaluates Risks and Protects Assets
An internal audit program assists management and stakeholders in identifying risks through a systematic risk assessment. A risk assessment can help recognize any gaps in the business environment.
Effective Control
An internal audit improves the efficiency of the organization by controlling its business risks. Periodic auditing helps managers identify suitable solutions to predominant business risks.
Ensures Compliance with Corporate Laws and Regulations
An internal audit helps prepare your company for an external audit. It will be easier to prepare the legal documents with the help of periodic internal audits. Internal auditing also helps a business revisit its key business processes, providing the opportunity to constantly scale and improve.
Level Internal Auditing Services in UAE
Level consists of a team of experienced accounting and auditing professionals who are ready to take over your burden of financial tasks and responsibilities. Our experts have years of experience in the finance industry under their belt, and they will put that experience to good use to help your business prosper.
Our Auditing firm in Abu Dhabi and the rest of UAE provides the following internal auditing services:
What Does a Financial Audit Imply?
- Evaluates the adequacy and effectiveness of internal controls.
- Reviews the reliability and integrity of financial and operating information.
- Reviews fiscal, operational, and administrative operations.
- Reviews systems established to ensure compliance with policies, plans, procedures, laws, and regulations that could significantly impact operations.
- Evaluates the effectiveness and efficiency with which resources are employed.
- Evaluates the accomplishment of established objectives and goals.
FAQs
- Financial Audits
- Compliance Audits
- Operational Audits
- Information Technology Audits
- Special investigations
- Consulting
- Liaison to external auditors
- Evaluates the adequacy and effectiveness of internal controls;
- Reviews the reliability and integrity of financial and operating information;
- Reviews fiscal, operational, and administrative operations;
- Reviews systems established to ensure compliance with policies, plans, procedures, laws, and regulations that could significantly impact operations;
- Evaluates the effectiveness and efficiency with which resources are employed;
- Evaluates the accomplishment of established objectives and goals.
- Statutory/regulatory requirements
- Board of Trustees requirements and requests
- Senior administrators request
- Annual risk assessment process
- Hotline calls
- Whistleblower complaints
- Management requests
- Research audit area
- Determine criteria
- Notify auditee
- Assess risk
- Plan audit
- Refine scope/objective/methodology
- Develop audit program
- Perform field work
- Communicate results
- Issue draft report
- Obtain management responses
- Issue final report
- Follow-up review
- Feedback from auditee
- Interview key staff and management
- Observe established procedures
- Examine supporting documentation and evidential materials
- Document organizational control activities
- Perform analytical reviews