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Internal Audit Basics

Get information on internal audit procedures for your business

By Terri Deno
Internal auditing is the process of taking the activities and processes of a company and analyzing any problems the company may have with organization. An internal audit can also refer to the process of checking on company finances as well, just like an official government auditor would during tax time.

Most of the time, a company will hire an objective, third party source to complete a corporate internal audit, but large corporations may have their own internal auditing department. Because information on financial internal audit basics is so varied, consider the following topics common to internal auditing before deciding which type of auditing could best benefit your company:

1. Audits can produce evidence of fraud or illegal actions.

2. An internal audit can turn up a variety of financial inconsistencies.

3. It's important to determine the reliability of the financial department to report the right numbers.

 

Consider internal audit software to help produce error-free financial statements

Small businesses can benefit most from internal audit software because it is inexpensive and can get the job done without a professional service. The software examines financial records and points out any inconsistencies it finds. This will help to catch even the smallest mistakes. This can save you a lot of time and also help you avoid an audit by the government.
Try: AuditSoftware.Net provides many articles and reviews on auditing software, including what auditing software can do for your business and how each software title works. BPS, a company dedicated to creating software for internal audits, has a full audit program and a demo you can check out.

Hire an internal auditor to get a comprehensive overview of your company's operations

Computer software can only take a company so far. Once your company has moved on to more complex financial transactions and bookkeeping, then an internal auditor should be brought in to examine the books. An internal auditor can take the time and assess all a company's needs over time. This way, the auditor can make recommendations to improve your company's organization.
Try: The Institute of Internal Auditors provides listings for certified auditors all over the world and in all 50 states. For more information on the way internal auditors are hired and what exactly is their job is, read about internal auditors at Investopedia.

Choose an internal auditing service for a complete audit of your company

Internal audit services are hired by large companies to do a complete internal audit of all departments. This gives a company a clear picture of its organization, so it can then take suggestions from the auditing service on how to improve upon the current system.
Try: Protiviti offers many internal auditing services, including audits that cover reorganization, optimization and management. KPMG provides many articles on internal audit services, plus a beginner's guide video to internal audit practices.

 

  • Most publicly traded companies will hire their own team of internal auditors to keep up with best practices, so consider hiring a full time auditor or team of auditors as your business grows.

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