Internal Auditing Mechanism
For checking the internal management system of an organization, the Internal Auditing system was conducted with the help of various audit firms in Dubai.
Classically, Internal Audit functions were set up by corporate management to assess the internal control system established by management. It works as a control mechanism to analysis the financial controls of the company.
According to the Institute of Chartered Accountants, an independent management activity, which analyzes working of an organization critically and also present suggestions for the betterment of mechanism of the entity, including the entity’s related strategic risk management and internal control system.
Experts do the main activity of internal auditing after doing detailed research about the culture of the business and processes. It checks for the adequacy of internal control to deal with risks, the effectiveness of the administrative process and organizational goals and objectives.
The purpose is to gain relevant knowledge of the entity’s accounting system, policies, and internal control procedures. It helps to establish the very expected degree of trust to be placed on internal controls. It is the path to assessing nature, timing, and extent of the audit procedures going to be performed. Apart from that, one of the primary significance is to coordinate the task to be completed.
As per the Institute of Internal Auditors (IIA), USA internal audit is an independent, objective-oriented system designed to increase value and improvement in an organization’s operational procedure.
Evaluating the efficiency of internal audit
- Cooperation from Management:
Inner audit system work cannot be conducted unless management shows positive attributes toward this system. Internal audit should make specific the main objective of conducting an internal review, i.e. an Audit charter may be helpful in this case as it present expectations of the stakeholders, auditors, and management. The primary purpose of Internal should be evident to the internal auditor and the top management.
- Reporting Channel:
Now, to make this system crystal clear report must present to high management without any tempering giving an accurate picture.
- Judging Significance of Internal Control:
It is essential to check if all the internal controls that exist are implemented and are effective. The internal auditor must have to consider a failure if he failed to understand the scope of the audit.
- Reflection of Audit report:
- The summary is given by Director – for top management.
- The operational head should provide an executive summary in this regard.
- The detailed audit report must be submitted for related operational personnel and for people who are being responsible for the implementation of recommendations and the CFO of the Company.
- Follow-up procedure:
The auditor should have a check and balance of required audit findings that need implementation.
- Feedback from the auditor:
The internal auditor must take input from the client on the audit report, which is the final product delivered. Feedback on the quality of the audit report taken from the top management.