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Internal Audit in India:

 

An Internal Audit is an evaluation process in an organization to ensure proper work of the management, legal adherence of the company and security of the information of the company. It is a very helpful tool for the evaluation of the performance and managing all the possible risks and threats. Regular Internal Audits ensure that the business entity is building the capability of surviving the competitive market. An Internal audit is the perfect time for the management of the organization to ask the most obvious but essential question:

1. Are they working effectively towards the set goals of the organization?

2. Are they effectively and efficiently managing the risks and threats in the organization?

3. Are they correctly following and applying the mandated policies and procedure?

4. Do they have a scope of improvement?

 

Based on these questions and after the auditing is done the management analysis and improvises wherever it is possible to better the management work. The main purpose of having an internal audit is to evaluate and accelerate the performance of the organization. The internal audit process can take up to few weeks depending on the size of the company, scope of the audit or the type of department being audited.

 

Internal Audit Checklist:

 

An internal audit checklist is a set of points that needs to be checked and evaluated during an internal audit process by the internal auditors. It is a tool for carrying the Internal Audit forward and systematically.  It serves as a reference point or journal for the internal auditors to do the internal audit effectively without missing out on any point.

ALSO READ: Benefits of using Internal Audit Checklist

 

Conducting the Internal Audit:

The Internal Audit process is conducted in an organization with a lot of steps. The steps involved are:

1.       The auditors will identify the areas that need to be audited.

2.       Also, how often the auditing in the specified area is needed has to be determined.

3.       A systematic calendar for regular interval audits needs to be maintained.

4.       All the departments must be acknowledged beforehand about the audits.

5.       The auditors come prepared with the internal audit checklist.

6.        The auditor/auditors interviews and investigate the employees about department, nature of their work etc.

7.       The auditor then documents his/her findings and his viewpoint after all the analyzing and interpretation. He also mentions any suggestions and recommendations he/she wants to give in it. 

8.       The auditor makes an audit report for the same to be given to the management and board of directors for future references.

 

Documents required in Internal Audit:

The documents essential during an Internal Audit Process are-

1.       Policy and procedure documents

2.       Organizational chart

3.       Key reports

4.       Books of account

5.       Descriptions and inventory data

6.       Data related to key applications and attributes

 

Internal Audit Report:

The final report or document containing the findings of the internal auditor during the internal audit, his/her viewpoints, suggestions, guidelines and recommendations is called an Internal Audit Report.

 

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