Question

Explain the role of internal auditing in business organizations.

Answer 1

The purpose of auditing internally is to provide insight into an organization’s culture, policies, procedures, and management oversight by analyzing internal controls such as operating effectiveness, controls, and compliance with any relevant laws or regulations.

Internal auditing programs are essential for overseeing and assuring that all of your business assets have been properly secured and safeguarded from threats. It is also important for verifying that the business processes reflect documented policies and procedures.

The five reasons that suggest the importance of internal auditing are

a)  By providing an independent and unbiased view, the internal audit function adds value to the business organization.

b)  By continuously monitoring and reviewing processes, we can identify control recommendations to improve the efficiency and effectiveness of the business processes.

c) The internal audit program will help us to track and document any changes that have been made to the business environment and ensure the mitigation of any found risks.

d) Internal auditing is beneficial because it improves the control environment of the organization by assessing efficiency and operating effectiveness.

e) It can also help provide us with peace of mind that you are prepared for your next external audit.