Internal audits are not in fact required by law. However, there are a number of benefits that come with taking the plunge. By understanding these benefits you will be able to see when you need an internal audit and whether they will benefit you.
The Benefits of an Internal Audit
The benefits of an internal audit trickle down through all aspects of your business operation.
- It identifies issues with the management. When an internal audit is performed, one aspect they inspect is the way management works with the staff. If there is a problem with management communication the auditor can demonstrate what the possible resolution may be found
- The audit enables testing of internal control systems. Internal auditors comb through all the processes in your business and tell you how to improve them.
- It helps to identify internal issues and problems. While you may understand that there is a problem, you might not know where the cause of it lies. Internal audits look at the root of the problem and tell you what can be done to remedy the situation.
- It establishes the responsibility of risk control and management. The internal auditor establishes who should be held responsible for certain risks, and the management of these risks.
- It assists people in the understanding of their responsibilities. Often people are unaware of who is responsible for certain processes. Internal auditors will identify who is responsible, and tell other members of staff.
- It improves information flows in the business. Information given to staff may not be of a high enough quality and this can lead to problems. Internal auditors will assess the quality as well as the quantity of the information that makes your business run.