The Internal Audit Function is one of the most misunderstood functions within most organisations and are seen a more a “police force” type role rather than their complex multifaceted role of providing advisory, audit and review activities for internal controls, internal audits, risk review, strategy advisory and business effectiveness. LinkedIn Article
The internal audit team are responsible to prepare audit programs based on the risks associated with operating the business to review all processes within the business to identify if the business is complying with the policies and procedures they put in place.
Additionally the internal audit function review the processes for productivity, control and effectiveness and test the procedures to identify areas for improvement.
Internal audit should be involved in investigation of any wrong doing in the areas of corporate governance including theft, fraud, anti-corruption, breaches of policy or legislation to support the Board and Management to make informed decisions on corrective action and preventative action to ensure issues to not reoccur.
With the above roles outlined the roles and responsibilities for the internal audit team can be as follows;
- Identification of the risk of all operations, market conditions, legislative requirements and global industry trends. This risk assessment should then be converted into a detailed audit plan which will measure the compliance, effectiveness and areas for improvement for all policies, procedures and practices within the business.
- Identification of suitable controls “industry norms” suitable for the industry to allow effectivness and improvement evaluations of the practices/policies within the business.
- Remain independent and impartial utilising their years of experience, qualifications and knowledge to act in an advisory position while being remote enough to not get involved in internal politics, decisions or operations.
- Design and implement investigation processes which can be implemented if there is any misconduct or breach in policies.
- Review all strategic policies prior to approval or issue including for example credit policies, corporate governance manuals/policies and financial policies.
In summary the internal audit team have multiple roles to be the “police force” the investigators, efficiency advisers and compliance reviewers for all actives with the intention of protecting the business from any wrongdoing by anyone involved in the business form the lowest to the highest employee. This makes their role extremely valuable in the implementation of a robust corporate governance system. Find out more