Internal Audit And Internal Control:

An Internal Audit can play a vital role to maintain the performance of any organization. An audit is a check that conducts for a specific time. It is an unbiased and measuring activity managed by auditors to improve the company’s reputation. Audit unit has the responsibility to provide discipline and systematic approach that works the risk control and governance processes.

Internal controls are the rules and procedure that manage the whole process of internal audit. It enhances the company reputation and promotes accountability by preventing fraud. However, internal controls can help the company to improve the operational efficiency and accuracy of financial reporting.

 Why Internal Audit and Internal controls are Important?

Internal audit is a mechanism that audits the company while the internal controls process to handle the audit, and both are important for a company's performance. Internal controls adequately designed to ensure that transactions will operate in an authorization and consistent way every time. The effectiveness of management based on three things such as consequences, compliance and expectations. However, internal audit performs by staff to carry out, and it is an essential part of the internal controls system. The team has full responsibility to execute the company's audit and deliver it to the audit committee.

Internal Audit and Internal controls Process:

Step1: Firstly, analyze the company's financial document, objectives, and performance-related tasks then determine the workflow. The internal determines whether the employees consistent and honest with the company or not. After collecting financial reports, the auditors can take notes, review documents and interview the employees. These assessment has also done by checking flowcharts.

Step2: Secondly, the auditors prepare a report list and then send it to the audit committee. The report consists of a summary and technique used for completing audits. Moreover, it includes the detail description of findings and has suggestions for the improvements of internal controls.

Step3: Finally, the audit committee reviews the financial reports and gives suitable advise to the concerned department.

Procedure- Internal Audit:

Evaluating Audit Risks:
Identify the risks that affect on company's performance and how it would deal with audit risk? Internal audit also designs to face business risks. The auditors provide possible future concerns, advice and insights.

 Manage Audit:
The internal auditors work in multiple levels and accessing the tone which manages the audit of the organization. They also tend to the audit effectively and provide management policies. So, auditors advise the managers at all levels for evaluating the controls.

Analysis of the procedure:
The auditors review the operations and report the findings. They also take a look at every operating procedure of every department in the company. However, auditors advise on how to optimize the process.

Final Report:
After reviewing the audit documentation and procedure for managing the audit, for this, make a final report for implementation of audit in an effective manner. This report also helps in the proper working of the company.

Procedure- Internal Controls:

Physical Controls:
The swipe cards and passwords commonly use for entrance in buildings, offices or any factory area. It is physical restrictions that play an essential part in physical controls. They also include physical limitation such as fixing non-current assets to prevent fraud.

Authorization and Approval:
There must be approval and authorization limits for many employees in the company. It includes particular approval limits such as manager have permit to book a business flight up to $500, but for more than this limit, he may have to get approval by senior.

 
Management Controls:
All these controls operated by managers personally. A manager is responsible for making a difference between planned and actual outcomes. Performance is also an integral part of manager posts. Furthermore, internal audit controls handled by managers step by step.

Objectives-Internal audit and Controls:

Review the internal audit and controls system
Examine the financial information
Review the audit with laws and regulations
Review the management of the audit process
Arrangements of safeguard assets
Identify management risks.
Monitoring risk management
Special investigation
 

Conclusion:

I hope this article will help you to understand the internal audit and controls better. It includes the process of identifying the audit documentation that prevents external fraud. Moreover, with internal audit and controls, enhance the company’s performance and its security. The auditors also provide a summary of full details to mangers and give suitable advises to them.

Drafted By:
CS.A.Maniraj.,B.Com.,ACS.,CA(Fin), Independent Director 
Certified CSR Professional., Certified GST Professional.