With the pandemic bringing in all sorts of uncertainties and scope for unpredictable events, people, businesses, and societies all have been immensely affected. The corporate world has experienced a major shift where people had to work from home instead of coming to their offices, and thus they had to adopt several innovative operating models to sustain their organizations.

These exceptional times need a revived approach from Internal Audit (IA), drawing on the particular set of abilities, skills, and knowledge that IA brings to the table. Companies are undergoing a significantly tough time, and there was a need for a better refurbished internal audit plan.

But what is Internal Audit in the first place?

An Internal Audit is the assessment of all facets of an organization by an internal auditor, who is a person who works as staff within the organization. His duty involves keeping checks on the financial reporting, accounting, operations, risk management, internal controls and all other such aspects.

What makes an Internal Audit different from a statutory audit is that an internal audit is recurring and not a yearly practice. The Internal Audit process can happen daily, weekly, monthly, quarterly, plus it is a continuous process.

The Internal Audit processes 

Once you can answer the question, 'what is Internal Audit?', it's legit to become more curious about the advantages of Internal Audit. However, before we move on to the advantages of Internal Audit, we need to learn about the Internal Audit Process.

To give you a brief about it all, here are key actions that Internal Audit must perform during the Covid-19 crisis:

• Identify and analyse the full range of urgent risks faced by the organization
• Evaluate business stability and crisis management plans, as well as IT arrangements
• Provide guidance on risks that may occur in the future and come up with efficient control measures for the same
• Bring about strategies and policies to adjust to the remote working conditions while still providing effective services
• Continue to monitor and update the company's Internal Audit plans cautiously

Advantages Of Internal Audit

1.  Enhanced Effective Management 

One of the most significant advantages of an Internal Audit is that it enables more effective management within the company.

The Internal Auditor will be able to figure out weaknesses and deficiencies of the organization in the operations or internal controls of the company and help you overcome them with the help of their advice and insights.

2. Continuous Review

The Internal Audit process provides the organizations with a rare and one-of-a-kind opportunity to carry out performance reviews in the ongoing year.

Internal Auditors do not have to wait until the end of the year to evaluate the company's performance. This also implies that if your company is not on the correct path, with the help of an Internal Audit, you can change course and correct the errors instantly.

3. Better Staff Performance 

The company employees remain vigilant and active when Internal Audit is a regular practice in the organization. This is because, there is the fear of their errors being caught by the internal auditor and having to face the responsibility immediately.

This results in improving and enhancing their performance. Plus, you get to minimize the scope of fraudulent activities in the organization for the same reasons.

4. Optimum Utilization of Resources 

Another advantage of the Internal Audit process is that it can be used to promote the optimization of resources. It will help point out the areas in which resources are underutilized or exhausted. And then, these can be rectified  to help control the costs and expenditures of the company.

5. Allocation of Work 

Internal Audits promote the division of labour. It is essential to check and examine the functions of all the departments and all of its employees. Thus, this becomes achievable with the help of the division of labour.

What Are The Types of Internal Audit?

There are four major types of Internal Audits that you must implement or practice in your organization to enhance productivity and they are as follows:

Compliance Audit 

Under this, the Internal Audit process is carried out to constantly check the level of compliance with the laws, regulations, and procedures. This is related to the statutory requirement. Ultimately, the aim is to have extensive internal control in auditing.

Operational Audit 

This type of Audit includes evaluating the operations of a particular department to determine their efficacy and productivity. The pieces of data and the bases used for it are operational policies and pre-defined organizational objectives, which might as well involve financial factors.

Management/Performance Audit 

This includes the check of organizational effectiveness considering the division of work amongst the employees. It can be done better to achieve efficiency, since the internal  audit is carried out independently, an excellent review of management operations and efficiency can be given.

Informational Technology Audit 

Under IT Audit, the information processing system of the organization is reviewed. It keeps an eye on whether the processes comply with the laws and if necessary, safety is in place or not. IT Audit aims to maintain data reliability, achieve organizational effectiveness, and protect assets.

How Can TRC Consulting Help Your Organization in Terms Of Internal Audit? 

Organizations must recognize the evolving scope of Internal Audit and its need with the ever-changing business environment and landscape.

At TRC Corporate Consulting, we understand the significance of adding value to the organization and work for its efficacy to achieve objectives. We choose and create a disciplined approach to measure and observe risk management's efficiency and compliance with the governance regulations.

Our experts provide constructive internal control in auditing with the pragmatic experience gained over the years. Help your organization flourish in the right way. Got any queries? Contact us now!