Internal auditing is a very important aspect for every company. Internal auditing simply refers to the checking of measures that have to be taken in order to ensure that the company’s operations are running smoothly & that there is no chance of errors whether accidental or fraudulent.
A part of internal auditing is to check how the internal controls of a company are functioning. Internal controls are the controls placed by the management of the company that prevents an event from happening that can cause company some form of damage. Damages include some form of asset misappropriation.
An example of internal control would be: A computer that has been password protected so that no unauthorized person can gain access.
Internal auditing also includes checking the inherent risks (such as checking a purchase trail from its origin until its payment) to find if there is a loophole that can be capitalized to someone’s advantage.
An example of inherent risk would be: A lack of proper authority for granting & approving purchase requisitions, purchase orders.
Purpose of internal auditing:
1) To safeguard its assets & liabilities
2) To keep internal processes under check.
3) To assess how the company is managing its risks.
4) To review a company’s corporate governance policy.
Our scope of work:
1) Checking existing controls & suggesting ways to improve deficient controls.
2) Suggesting new controls to be placed in areas that are vulnerable.
3) Checking all transactions of a company i.e. 100 % test check basis.
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