Internal audits are essential to the health of any business, no matter how big or small. This process highlights the function of internal controls, corporate governance, and things like accounting processes. The internal audits that businesses conduct can be managed by a team of specialists that are in-house, or they might be managed by a skilled third-party auditing entity.
In most cases, having a third party take care of your auditing needs can have a big impact on the quality of your auditing results. It can be hard to identify problems and lapses on your own with objectivity. Conducting audits is an essential aspect of running a successful and healthy business, and if you own a company, you need to be sure that you are using this operational tool to your advantage.
Kinds of Audits
There are also various kinds of audits that you can conduct. You might need to do the following kinds of audits:
- Compliance Audit
This kind of audit helps companies to adhere to local laws, compliance requirements for internal functions, and government regulations.
- Financial Audit
Public companies are required to conduct this kind of auditing, but all other companies can benefit from this kind of audit as well.
- Environmental Audit
Reviewing the effect that a company has on the environment can be required in some industries, but it can be helpful to companies of all kinds to assess this kind of impact.
- Technology or IT Audit
IT audits can be done for a variety of different kinds of IT functions within your company.
- Operational Audit
This kind of audit is often required when key personnel leaves the company or when restructuring is necessary.
- Performance Audit
This is the most common kind of audit that companies run. These audits can improve processes and other kinds of internal functions within any kind of business.
Some companies also run special investigations into specific unique functions for their unique industry as well.
How to Conduct an Internal Audit
Internal audits can be hard to complete if you don’t know what the proper steps related to conducting them might be. You also need to know which tools will help you to make the most of your internal audit process. Internal audits can be done on a daily basis, on a weekly basis, or even monthly or annually.
Tools like AdaptiveGRC – Internal audit tool can help you to manage your own internal auditing processes with ease. Tools like this allow you to summarize the findings of your audit clearly, and they can help to create actionable items that your business can work on once the audit has been completed. The steps of an audit are as follows:
You will need to make a game plan for your internal audit to make sure that you are looking at the right factors and functions as you take in data. The audit plan should have a checklist of which team members and which processes will be reviewed. It should also include the right managers and primary actors who need to undertake the tasks that will be used to review functions later.
Communication and data collection are essential to the audit process, so you will need to be sure that you are set up to be able to do both during the audit effort.
The actual audit itself can be done while work processes are being engaged in by staff in most cases. Things like flowcharts, business manuals and guides, department control policies and more can be looked at as part of the audit process. Analysis should be done based on random sampling to be sure that all the various moving parts of the company are being examined during the audit.
The scope of the audit should have been determined prior to the auditing process being done. This will help to guide the beginning and end of the auditing work that needs to be done.
This is where auditing tools can be a big help. You will need to condense the data that you have collected into a meaningful report that creates actionable items. The final report will become the guideline that is used to help create lasting change that your business can benefit from. Reporting is the most essential outcome of the auditing process and you need to be certain that you are going to be able to collect the data that you need to support accurate reporting at the completion of the auditing work that is being done.
Since you have used the audit to create actionable steps that your business and management can take to make things better for everyone, you need to monitor the work that is done after the audit is complete. The ongoing review that is done after the audit needs to be as attentive as the data collection that was done during the audit. There is no point in running an audit if the business does not make changes in order to create positive outcomes related to the audit findings.