Internal audit: its concept and role in corporate activities

The mysterious phrase "internal audit" actually conceals a tool of enormous strength and incredible possibilities. It not only allows to increase the efficiency of any business, but also increases the number of competitive advantages of the company. Internal audit is increasingly implemented by managers of their own enterprises. They treat him like a magic wand, which can fix the state of affairs and direct profits up the hill.

About this management discipline began to speak only at the beginning of the third millennium, although it began to develop even after the Second World War. What is the reason for such a growing interest?

• As mentioned above, internal audit, although for a long time and was not appreciated, but in able hands can repeatedly increase the return of your business.
• Do you remember the series of scandals that in recent years have engulfed the countries of Western Europe and the United States, and related to corporate policy? This is the clearest evidence that due to failures in the external audit system , even the largest firms are not insured against bankruptcy.
• Well-planned management in the most positive sense attracts the attention of investors, as a result, in their eyes, the activities of your company becomes even more effective.

In modern Russian realities, several other factors are added to these factors. These include the desire to streamline the organization of the business process, and the potential savings of financial resources, and an undeniable benefit for the owners of companies that depart from the conduct of business and pass all the cases to qualified managers.

What is internal audit?

According to one of the definitions of an international independent institute of internal auditors, this is an objective activity that provides comprehensive guarantees for the improvement of the company. In any field, internal audit sets as its uncompromising goal the achievement of the set tasks, through a systematic approach, while increasing the effectiveness of control in the workplace, as well as corporate governance in general.

Let's dwell on some characteristics of this definition in more detail.

Objectivity is one of the obligatory qualities of any internal auditor. He must be impartial in all his assessments and judgments.

Perfection means that any internal audit aims to not identify already existing management errors, punishing the perpetrators in all rigor, and writing about this multi-page reports, namely, to increase the efficiency of all processes of activity and corporate systems.

Guarantees - on an equal basis with consulting support, they are received by every internal audit client. Today, this area also includes internal control, multi-purpose risk management, corporate performance and some other activities.

Is internal audit necessary at the enterprise? The decision is made by the owner or top management. And the expediency of it is indicated in each case individually. From ourselves we will notice: managers of the company that control all aspects of business and do not see the need for internal audit can, over time, experience the mistaken illusion of complete control. However, in practice it often happens that physically the leading forces themselves are no longer able to fully cover the entire activity of the company. In such cases, an internal quality audit can prove to be very useful. But is it not too late?