If your business is larger than a small business, you might find the need for an internal auditor. If you’re not sure what an internal auditor is or what role they perform, we’ll be covering that in this article.
Every business, especially medium to large businesses, needs the help of experts in a particular field from time to time, so let’s discover if an internal auditor is a professional service that would benefit your business operations.
What Is An Internal Auditor?
An internal auditor is an expert who might be hired on a temporary or permanent basis, depending on the size and scope of your operations and whether you need ongoing internal auditing tasks or a one-off evaluation periodically.
Internal auditing ties into the risk management umbrella, with the objective being a focus on financial aspects of the business, as well as business operations and governance. Evaluations need to be completely objective and unbiased, which is why sometimes it’s more beneficial to contract an independent operator who has no direct ties to the business itself; either as an employee or otherwise, particularly when it comes to corporate governance. But that’s not to say you can’t have an internal auditor on your staff full-time, as this can be extremely beneficial too.
One of the main roles of an internal auditor is to discover risks and problems that exist inside the business and arrange to have them corrected before they can be discovered either by an external audit, or a governing body.
The 3 major roles of the internal auditor are:
Assessing risks and problems within a business or corporation
Guaranteeing that the company and all of its employees are in compliance with laws and regulations that govern the industry
In the event of a failed audit, make recommendations on what needs to be rectified so the company can pass an audit
How An Internal Auditor Can Help Your Business
One of the key roles your internal auditor can play is to help prevent you from getting into trouble with governing bodies and the authorities. This is achieved by ensuring your business is compliant with rules and regulations and that every single team member is aware of what’s required to remain compliant.
If your company is seeking investors, an internal audit can ensure that all of your financials are in order, so that if and when the Securities and Exchange Commission (SEC) check your financial records, there are no discrepancies that will thwart investors. This is an extremely important step if you’re seeking finance from investors to enable you to expand and take your company to the next level.
Internal auditing is also about risk assessment, management and mitigation. Risks could involve your business processes and whether any of them present a physical danger to workers, customers or visitors. Other risks include mishaps that could lead to slowing down or stopping production, wherein the company loses time and money. If your business relies heavily on IT and the internet, then the risk of attacks from cybercriminals is a very real threat. IT systems security will also be high on the internal auditor’s agenda when assessing business risks.
It’s far more favorable to identify potential risks before they’ve had a chance to cause a problem and do something to correct them early on. The alternative could end up being something with catastrophic results in a worst-case scenario.
Dedicated Software For Internal Auditors
The internal auditing process will be helped along if you invest in and install internal audit management software. Whether you bring in an auditor on a temporary basis, employ a professional full-time, or you or one of your employees takes charge of internal auditing, the software is designed to make life much easier.
Dedicated software helps you manage the auditing process every step of the way. It will come with advanced analytics and you’ll be able to compile and print or submit reports in a heartbeat. Internal auditing programs work with you to manage risks, audit your financials and processes, as well as helping you remain compliant with the law.
Now that you understand what an internal auditor actually does and how they can help with your company, it might be time to seriously consider hiring one and having them perform an internal audit of your business.