How to Perform An Internal Audit in Your Business
Speaking of general business, conducting an internal audit is the most basic approach in monitoring the internal business operations of the business, and identifying if there are inconsistencies. Not only that, internal audits are also performed so that the organization will know gaps in business operations and identify more opportunities for improvement.
Internal audit is also an approach of audit operations that is made inside the organization to evaluate the agreement of the internal procedures and its systems. But the main purpose of this procedure is to confirm and ensure that the company’s terms and policies, as well as procedures are still being performed and followed, so that the head management will be informed about the gaps identified in the observance of the policies.
The internal audit procedures can be requested to any internal resources or can also be contracted out to any external third party provider. But before choosing an external agency, the company must make sure that the external agency is one who is skilled in auditing and has an organized internal auditing procedures that would greatly help the company. However, the purpose of the entire internal auditing procedure is not to expose the mistakes of the specific company, rather to identify areas for improvement, which gives the company the opportunity to have and overall growth. The regularity of the internal auditing of a company surely would give them more opportunities to maintain their present good condition and enhance their compliance of their protocol procedures.
The whole duration of the internal auditing can consume a lot of resources of the company, especially the time. In terms of its frequency, it can be performed daily, weekly, monthly or yearly. You will be able to find out here the basic steps in conducting internal auditing.
The first thing to note is to assess areas that require auditing. List the departments and their functions that need auditing by making use of the procedures and policies made by the company.
Next is to determine the frequency of the internal auditing based on the company’s need. There are some departments that need only to be evaluated yearly, while some need to be audited daily or more frequently including those areas that have manufacturing procedures, ensuring the daily quality of the products.
Having a scheduled auditing by marking schedules on the business calendar makes sure that their works are performed regularly and tasks are completed.
Another thing is that the auditor must be knowledgeable of what needs to be evaluated to a specific area or department, to have an efficient and spontaneous process of auditing.
Lastly, document all results and differences and then report them to the head management for any immediate action and responses.
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