Who is an Internal Auditor?
Internal audit an evaluation process for analyzing all the aspects conducted in the business firm. It is undertaken by a person who works as an employee of the company and is known as internal auditor. There are so many benefits and advantages of internal auditor in the company. And it is utterly important for the auditors to possess the core competencies of today’s internal auditor. The key work of the auditor is to keep a tab and check on various activities of the company such as accounting operations, financial reporting, internal controls, risk management and manufacturing process etc.
An internal audit service is quite different from its counterpart statutory audit service. The internal audit is performed by the internal auditor on daily, weekly, monthly, quarterly or yearly basis because it is a continuous process but the statutory audit is likely to be conducted only once in each financial year.
Advantages of Internal Auditor for conducting Internal Audit:
A company requires auditing on regular basis due to the tons of benefits. These are the following advantages of Internal Auditor appointed by the company as a regular employee in the organization-
- Helps in more effective and efficient management: one of the main advantages of Internal Auditor in the company is that they are able to point out all the weaknesses and weak points of the system or operations of the company. Conducting an internal audit also helps in facilitating a management that is more efficient and effective as they can use the insights provided by the auditor for improvement and achieving the goals of the organizations.
- Well defined division of Work: The division of labor can be promoted with the help of internal audit. The company is required to keep a complete check on all the departments and units in the organization and keenly observe the activities carried on by the employees. This is where one of the advantages of internal auditor comes in, as they help in proper division of work by evaluating all the key areas in the department.
- Ongoing Review: The internal audit process provides the business organization with an opportunity that is unique in conducting a proper review of all the performances in the year of its ongoing. This goes hand in hand which means the performance is being audited or evaluated by the auditor as soon as it is completed. This is one of the major advantages of internal auditor being appointed in the staff of the company. The company is not required to wait till the end of the financial year as in case of statutory audit or for external auditors to conduct a detailed review process regarding its activities and work processes. It also helps the organization to correct and improve their respective mistakes on time without facing any major losses or damages.
- Ensures efficient and optimum utilization of resources: One of the key advantages of internal auditor in the company is that the internal audit performed by them for the internal control system is used as a tool for promoting better and optimum utilization of the resources of the organization. It helps in pointing out all the areas where the resources are being wasted or are underutilized by the department. With the help of the internal auditor such mistakes can be corrected timely in order to control all the expenses and costs of the organization and make it more efficient.
- Improvement in performance of the staff: When the staff and employees of the company are aware that they are under review and checks all the time, this makes them alert and active. This is another important advantage of internal auditor in the company. As his/her presence in the organization is likely to create a buzz among the employees and they will be under a fear of being caught for all their mistakes immediately.
Internal audit process can be really beneficial for the entity in the long run as the chances of mistakes or fraudulent activities or unethical work will be minimized and reduced. The performance of the staff will be enhanced and the good morale, values will be boosted among the employees.