Why Examine The Strength Of Your Business’ Defence Against Problems?

Large companies often create special audit units for internal control over the activities of management and the enterprise. This allows senior management, owners, and investors to assess the safety of assets and monitor the performance of managers

In this blog, you will learn what are the functions of the Best Internal Audit Firms in India, who can perform an internal audit, and what audit methods allow the auditors to manage risks, control accounting, and identify fraudsters in the company.

Internal audit is a sign of a properly built corporate governance system. And at the same time, a very effective mechanism for informing management about the work of all subsystems in the organization.

Whether an internal audit is needed in a company is decided at the level of the board of directors or owners. It is implemented by the supreme executive bodies or the internal audit department. At the same time, the head of the department is directly subordinate to the top management, the same board of directors, which ensures the objectivity and independence of his work.

There is a misconception that an internal audit is akin to punitive authority or internal “police” in a company. This happens if an audit and control service worked before its creation. But the internal audit does not aim to punish or fire someone. Rather, it analyses the extent to which management controls and solves problems, whether general corporate goals are being met, procedures and business standards are being followed.

In this sense, the audit provides an objective view and at the same time brings added value to management. Best Internal Audit Firms in India perform many other functions, which are conventionally divided into 3 groups:

1. Control information
2. Conduct methodological analysis
3. Offer to consult.

What internal audit controls:

• Reliability and efficiency of the internal control system (is the procedure for conducting financial and business operations and control checks in the company observed);
• Compliance with internal regulations, accounting policy requirements, and top management decisions;
• The reliability of the information based on which the management decisions were developed;
• Activities of various levels of management;
• The correctness of accounting and tax accounting, as well as the preparation of financial statements (whether legal and regulatory requirements are observed);
• Safety of the company’s property.

The analytical functions of the internal audit include:

• Informing the top management about the efficiency of the divisions’ work and revealed violations in the company;
• Investigation of individual incidents and suspicions of fraud;
• Preparation for an external audit, for inspections of the tax and other regulatory authorities;
• Analysis of internal flows of material resources, to what extent budgets and estimates are being executed;
• Assessment of the influence of factors of the internal and external environment on the activities of the organization.

The Internal Audit Department is involved in the development of tax and accounting methods in accordance with the requirements of the legislation and analyzes the effectiveness of the management accounting system, tariff policy.

Advises management on how to eliminate violations, optimize business processes and improve management efficiency in the company. All this constitutes the methodological and consulting function of the Best Internal Audit Firms in India.