Audit and Assurance
Internal Audit: Adding value, improving operations
An in-house team or a third-party service provider performs an Internal Audit is an autonomous and objective process carried out to improve business operations. This includes identifying and preventing fraud or errors through monitoring, conducting investigations, and addressing any issues found.
Once a business assigns tasks such as bookkeeping, accounting, payroll processing, and inventory to a team, an Internal Audit becomes necessary to ensure correct and compliant completion of these tasks.
In monitoring these tasks, Internal Auditors can add value to a business by identifying areas for improvement such as the following:
Corporate governance practices
This helps a business to foster a culture of integrity and foresight as well as improves overall business performance and profitability.
Using official standards.
Internal Auditors are also able to assess how compliant a business is in its performance of tasks according to industry and accounting regulations, as well as official standards of ethics and accountability. They are then able to recommend solutions to the business based on its observations and assessments.
The standards used for Internal Audits include the International Professional Practices Framework (IPPF), which was put forth in 2015 by the Institute of Internal Auditors (IIA) in the US; and the International Auditing Standards for the Philippine Public Sector (IASPPS).In using these standards, Internal Auditors also ascertain the veracity of the financial statements submitted to external auditors, who rely solely on the accuracy of the statements they receive.
Assurance and consulting.
The tasks that are carried out during an Internal Audit include assurance and consulting processes such as the following:
- Valuation of strategies and procedures
- Operations and management audits
- Compliance reviews
- Advisory and council
- In-house training
- Conducting workshops and meetings
For these processes to be effective and reliable, Internal Auditors must have unrestricted, transparent access to a business’ records and facilities, as well as the full cooperation of its staff.