Internal audit is a methodology based on objective assessment of the risks laying in the company’s activity In order to provide the organization the tools to further promote its goals and to effectively utilize its resources. As part of the internal audit the company performs risk assessments in order to identify weaknesses and vulnerabilities in the organization while providing proper solutions and Implementing Controls that might improve and make better efficient of the company’s activities and to minor it’s exposures.
The internal audits status has grown stronger in the last few years due to the collapse of on multi-national companies as a result of control failures which led to their collapse. Because of this it has been legist rated in many countries including Israel, the appointment of an internal audit in certain entities including public entities supported by the country including government companies, public companies, banking cooperation’s, insurance companies and more.
The internal audit is required to be independent and as such fitted to the needs and characteristics of the entity according to it’s goals, in order to analyze the entity’s risks and to find proper solutions. In order to improve the quality of the audit a full cooperation is needed with the management in order to obtain vital information and to alert from any risks at real time.
Following are the working stage of the internal audit:
- Risk survey – in this stage a full review of the company is being held while locating any risk factors and failures in the internal audit of the organization. The review is done by questioning the operational activities in each step, after which an analysis on the activities is being done as well as identifying risk factor.
- Planning the internal audit – after performing the risk served, the auditor plans the annual auditing or multi-annual according to the organizations activities and with accordance to the importance level of issues that may become risk factors in the organization in order to achieve effectiveness and efficiency in performing the internal audit by focusing the audit areas.
- Performing the internal audit – this is the stage in which the internal audit performs his tests according to the audit plan effectively using programs and designated tools to perform the audit, to locate failures and risk factors in the organization and to examine a better outline of the business activities.
- Reporting the audit results and recommendations – in this stage a report is submitted to the organization’s management that specifies all the failures and risk factors that were uncovered by the internal audit, and giving solutions to improve and minimalism the risk factors.
- Examining the effectiveness of the recommendations – in this stage the internal audit examines the implementation of the recommendations/ solutions as proposed to the organization, and weather there has been an improvement. These results are reported to the organization’s management to rebalance and come to conclusions as well as examining future organizational procedures.
The internal audit is a very important tool for monitoring and controlling the procedures being held in the organization that might assist the management to obtain their goals efficiently and effectively by minimalism the risks the organization is exposed to during it’s business activities.
Our office provides internal auditing for all entities while emphasizing personal and professional skills. For internal auditing services – please contact us.