The Importance Of Internal Auditing
Introduction
What is Internal Auditing? What is the scope of Internal Auditing for companies? Why is Internal Audit important? How can an effective Internet Audit assist management to improve companies’ performances? (IIA, 2014 P.2)
In general, the related business theory two factors of exploration on the identity organizational performance. The first factor is an economic tradition, the significance of external market elements in evaluating organizational performance. The second factor is base on constituted the behavioral and sociological pattern and implied organizational elements, good for nature as the significant determinants of achievement. Academically, it would not be regarded as the organizational competitive components. Traditionally,
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“Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.” (IIA, Oct 2012) (IIA, 2014)
What is the scope of Internal Auditing for companies? The scope of internal audit work grasps the most extensive of corporate governance and risk perceiving that controls exist in organizations to supervise risks and advance powerful and efficient governance and executive. The types of internal audit work as the following: (IIA, 2014)
(i) Assurance services – giving objective examination for independent evaluation of risk management, control and governance procedures (IIA,
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All guaranty mechanisms are critical cooperation of the different certification actions will give entirely commitment. Internal audit highlights unmistakably, that is a foundation of good corporate governance in organizations and make sure an imperative part to enhance supervision and responsibility, both financial and non–financial. It likewise can be an essential action to give certification to the directorate, the review board of directors, and the CEO and stakeholders that the organization is managing effectively. (IIA, 2014)
The major types of Internal Audit (Brown University, 2016)
(i) Compliance Audits - assurance that ethical and compliance behavior with internal controls that avoid or discover violations of laws, or code of conduct and assure that compliance and obligation to inform the whole organization. (Brown University,
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