Internal audit: its concept and role in corporate activities
The mysterious phrase "internal audit" onin fact, it hides behind itself an instrument of tremendous power and incredible possibilities. It not only allows to increase the efficiency of any business, but also increases the number of competitive advantages of the company. Internal audit is increasingly introduced by managers of their own enterprises. It is treated as a magic wand, which can fix the situation and direct profits up the hill.
About this managerial discipline began to speak only at the beginning of the third millennium, although it began to develop even after the Second World War. What is the reason for such a growing interest?
- As mentioned above, internal audit, although for a long time and was not appreciated, but in skillful hands can repeatedly increase the return of your business.
- Remember the series of scandals that swept theyears of the country of Western Europe and the United States, and related to corporate policy? This is the clearest evidence that due to failures in the external audit system, even the largest firms are not insured against bankruptcy.
- Well-planned management in the most positive sense attracts investors' attention, as a result, in their eyes, your company's activities become even more effective.
In modern Russian realities, these factorsin addition a few others are added. These include the desire to streamline the organization of the business process, and the potential savings of financial resources, and an undeniable benefit for the owners of companies that depart from the conduct of business and pass all the cases to qualified managers.
What is internal audit?
According to one of the definitions of internationalindependent institute of internal auditors, this is an objective activity that provides comprehensive guarantees for the improvement of the company. In any area, internal audit sets as its uncompromising goal the achievement of the set goals, through a systematic approach, while increasing the effectiveness of control in the workplace, as well as corporate governance in general.
Let's dwell on some characteristics of this definition in more detail.
Objectivity- one of the mandatory qualities of any internal auditor. He must be impartial in all his assessments and judgments.
Improvement- says that any internal auditaims to not identify already existing mistakes in management, punishing the perpetrators in all severity, and writing about this multi-page reports, namely, to increase the effectiveness of all processes of activity and corporate systems.
Guarantees- on a par with advisory support, theireach internal audit client receives. Today, this area also includes internal control, multi-purpose risk management, corporate performance and some other activities.
Is internal audit necessary at the enterprise? The decision is made by the owner or top management. And the expediency of it is indicated in each case individually. From ourselves we note: managers of the company that control all aspects of business and do not see the need for internal audit, with the passage of time, there may be an erroneous illusion of complete control. However, in practice it often happens that physically the leading forces themselves are no longer able to fully cover the entire activity of the company. In such cases, an internal quality audit can be very useful.