Internal audit looks at a company’s performance with regards to its predetermined performance KPIs. An internal audit gives the organization’s management and board of directors actionable information covering the different operational and business process improvements. The aim is to improve the overall operational efficiency and maximize profits.
The focus is on business activities that improve management’s effectiveness. The auditors act as in-house advisors on matters involving setting up control mechanisms for various operational matters. The mandate for internal audit covers the business activities that need scrutiny.
There are different matters a comprehensive internal audit usually covers including compliance with laws and regulations, operational efficiency, and management effectiveness. The audit request documents also mandate looking into fraudulent activities, validating processes involving financial reporting, and also recommendations to take steps to avoid potential financial losses in the future.
Internal audits can be initiated at the request of the business management, lenders, financial institutions, or a government agency. The main purpose of conducting an internal audit is to provide actionable information that would help improve a business’s operational readiness against risk assessment.
Reasons for Conducting Internal Audits
High-quality internal audits set a corrective path for a business organization to grow and increase its profits. Good audits identify the areas within the management processes that need improvement.
They enable companies to efficiently use their resources including finances, human resources, workforce, property, assets (tangible & intangible), intellectual and others that can potentially contribute to organizational profits.
Senior business management relies upon internal audits for having a better understanding of the working of different organizational divisions. They know which departments are working and which ones need improvement. The focus is also concentrated on non-performing divisions to make them profitable, merge them with some other departments or altogether liquidate their presence.
Investors and financial institutions also rely on internal audits for ensuring financial support and providing an overview of the overall risk assessment. Internal audits also help identify any suspicious employee actions or other hidden business risks to suggest defense measures and corrections.
Internal audits also become mandatory in case of changes in government regulations to assure compliance. For instance, recent environmental changes in a marketplace may also need for internal audit and proper risk assessment of the new marketplace.
Regular internal audits focus on risk management, conducted as per a predetermined schedule. A business can face many hidden and apparent risks. Internal audit re-aligns management’s focus in timely identification of such risks to offer suggestions to new and previously known risks.
Many new startups have scheduled internal audits to review their business plan. Such audits ascertain if the business is run as per plan. In such scenarios, the internal audit reviews the business to identify weaknesses and suggests required corrective action.
There can be many reasons for conducting an internal audit. Authorization of an internal audit helps establish its scope and the information required in a formal document as per the audit charter. Specific directions within the authorization document help set the direction right for the internal audit.
Before the start of an internal audit, determining and setting its scope is a must. Top accounting and auditing firms in Qatar always ask for specific instructions within the authorization documents. Some companies have separate departments for audits to perform such tasks. These departments can also set the scope of an internal audit and mention it in the authorization documents.
Performance of an Internal Audit
An outside accounting and accounting service in Qatar can perform internal audits. A company’s own accounts and finance department can also conduct an internal audit. Small companies mostly do not have a dedicated internal auditing department so they choose to use outsourced accounting services. Large-size companies on the contrary have well-established functions to take the necessary decisions as things become more complicated.
When there is a statutory or obligatory need to have an internal audit performed by an external entity by a government agency or a lender, the authority may also specify the choice of the auditor. Similarly, an organization can also order audits from within itself and utilize its own auditing functions unless they need to rely on the services of an external entity to maintain impartiality.
An outside auditing agency in Qatar like BookkeepingQatar.com can ensure transparency and objectivity. A lot relies on the auditor conducting the internal audit as their efforts directly impact the quality and integrity of information they provided. Well-known auditing agencies in Qatar like BookkeepingQatar.com always maintain a high standard of quality and integrity.
Initiation of Request for an Internal Audit in Qatar
Internal audits can be initiated due to a number of reasons. New businesses usually make it part of their business plan to conduct internal audits. The purpose of such audits is to measure and improve management’s effectiveness and ensure the enterprise is running as per the business plan. Sometimes, the business’s management can also hire outside auditing entities such as a chartered accountant firm on the request of shareholder groups and lenders to evaluate business risk before they decide to invest money in a venture.
The government agencies also request internal audits to comply with the regulations and showcase strong business acumen. Management can ask for internal audits to identify and overcome business risks by investigating suspicious or inappropriate activities by the employees. They may also request internal audits to improve the performance of a low-performing department and identify as well as mitigate outside threats to contribute to the business’s success.
Insights Internal Audits Potentially Offer
The internal audit chartered or the authorization documents determines the scope of the audit before it starts. The request determines the scope of the audit and the type of information you can expect it to return.
Examples of information that you can expect from an internal audit include
- The identification of already known and newly revealed risks and also actionable suggestions to overcome them
- Examination and reporting of the effectiveness of the management across the different levels for different company divisions
- A compliance audit reports on matters involving government regulations and the established business practices
Regulations Governing Internal Auditors
A professional network known as IIA (The Institute of Internal Auditors) regulates qualifications relating to internal audits like CIA (Certified Internal Auditor). IIA issues certifications for the individuals and certified professional auditors with particular specializations.
A top internal auditing firm in Qatar will always use the services of certified auditing professionals. Certified auditors exhibit strong knowledge and understanding of the various technical aspects covering internal audits and also oversee ethical principles as a critical part of the field of auditing. Qualified auditing professionals also rely on CPE (Continuing Professional Education) to remain updated on the new trends and technologies for maintaining valid certifications.
How Do BookkeepingQatar.com’s Internal Auditing Services in Qatar Help?
BookkeepingQatar.com has a team of experienced and qualified professionals who carefully evaluate each internal auditing assignment to strategically decide how can they add value at an affordable cost to the client organization, resulting in improving the overall business efficiency.
BookkeepingQatar.com delivers professional internal auditing services to help businesses succeed. We rely on a consultative approach, backed with strong technical knowledge for assisting the clients. The services we offer keep the directors and senior management onboard on the effectiveness of current processes and systems, advising on ways to further improve them. Our recommendations also focus on bettering the business process and systems efficiency and effectiveness.
The internal auditing process that we follow helps overcome hidden factors negatively impacting the growth of your organization. We act as strategic advisors helping you maximize the efficiency of your company’s resources, enabling you to put them to the best possible use.
We have hired specialists who closely work with you to oversee the different functions coming under the ambit of internal auditing. They assist you in developing and deploying highly effective internal audit functions to achieve top objectives.
BookkeepingQatar.com ensures the allocation of resources to provide you with the support that effectively meets all your requirements. Technical expertise also includes advice on any changes to the internal auditing department. The use of the right tools and internal auditing assets helps you achieve strategic internal auditing goals while ensuring exceptional quality audit work.