In the modern business environment, optimizing each aspect of an organization can be the difference between success and failure. Integrated internal audits serve as preventive and corrective controls in addition to being detective controls. An internal audit can mitigate deficiencies before they become major problems.
External auditors are generally focused only on reliable financial statements to establish credibility with financial institutions. Internal auditors use a broad focus and perform audit procedures to produce reliable and accurate financial statements, but also document and quantify operational effectiveness and efficiency; as well as reduce exposure related to compliance issues. This means that the scope of an internal audit can be as specific as to a single process or it can be as broad as the overall governance of an organization.
While both internal and external auditors are independent of the process being audited, external auditors are also independent of the organization being audited while internal auditors are often employed by the organization. Internal auditors report directly to the board of directors. Internal audit functions can easily be out-sourced allowing entitles to realize their benefits without incurring major investments.
The Institute of Internal Auditors (IIA) has defied internal auditing as an “independent, objective assurance and consulting activity designed to add value and improve an organization’s operations.” Internal auditing helps an organization accomplish its objective by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance. The IIA also oversees the internal audit profession by offering several certifications. The primary designation offered by the IIA is the “CIA” or Certified Internal Auditor. CIAs are audit professionals who have demonstrated their audit prowess via education, experience, and examination requirements.
At Abacus CPAs, our auditors have diverse backgrounds and experience in both internal and external audits, tax preparation and consulting enabling us to provide a broad perspective. Call us to learn more about internal audits and The Abacus Way of providing better guidance so YOU can make smarter decisions.
Matt Clark, CPA, CIA