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Internal audit is an independent assessment of the effectiveness of a company’s operations. Its task is to ensure compliance with all necessary standards and requirements approved by the enterprise. The functions of an internal auditor go beyond simply checking financial statements, they cover all aspects of the company’s activities:
The Conformity Assessment Center will help you establish all processes related to internal audit.
One of the most important functions of an internal auditor is to identify and assess the risks that the company faces. These can be:
Risks can relate to both external and internal processes. The auditor analyzes possible dangers, their impact on the organization’s work, creates a list of risks, and assesses them from the point of view of the probability of occurrence and possible damage.
The task of such a specialist is to propose measures to minimize risks, develop recommendations that will help the company avoid unforeseen expenses. Thanks to this approach, the company’s management gains a clear understanding of current risks. In addition, it becomes possible to develop actions to minimize and eliminate them.
Internal audit evaluates the work of all departments of the enterprise, their interaction and compliance with established standards. This includes production, sales, logistics and financial operations.
The auditor examines the structure of processes, identifies weaknesses. For example, if errors often occur in the production process, he may recommend:
The auditor’s actions will help increase productivity and improve the quality of the company’s work. Regular verification of internal processes and identification of shortcomings help the company remain competitive.
The internal auditor also ensures that the organization’s activities comply with legal requirements, internal regulations and standards. His task is to control the company’s processes. It is necessary that they are performed in accordance with established norms. All violations must be detected in a timely manner.
An effective internal control system allows the company to quickly identify and eliminate difficulties related to the safety and reliability of work. The internal auditor analyzes the effectiveness of control, assesses its suitability for preventing possible risks and proposes improvements.
For example, if internal control does not cover important aspects of the company’s work, the audit specialist may propose new methods. They will meet the current needs of the enterprise.
This function of the auditor helps the company remain protected, quickly identify weaknesses in the management system. Improving control helps reduce the likelihood of losses and strengthens the overall resilience of the enterprise to risks.
Financial statements are the basis for analyzing the company’s activities. The adoption of correct management decisions depends on its accuracy. The internal auditor checks the correctness of the preparation of reports, its compliance with accounting standards and legal requirements.
Correct reporting is necessary to attract investors. It also allows you to maintain trust from banks. Internal audit in this case helps the company guarantee the high quality of reporting and minimize the risk of financial violations.
The internal auditor advises the company’s management, provides it with information about possible risks, and offers options for solving them. He can act as an independent advisor. The auditor assesses the consequences of strategic decisions, analyzes their impact on the long-term sustainability of the enterprise.
As a result, the management receives an objective assessment of the effectiveness of the work. On its basis, it becomes possible to make more balanced management decisions.
The advisory function of the internal auditor is especially important during restructuring, expansion of production or entry into a new market.
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