The changing culture within UK companies to become more transparent is seeing the number of internal audits increase. An essential financial tool to assess a company’s position, it is seen alongside competitor benchmarking in terms of its importance in the process.
However, companies can also see it as something that just needs to be done – a tick in the box. Instead though, many industry leaders feel that the internal audit should be an integral part of a business and can be used to drive other areas.
An article on AccountancyWeb recently looked at why it can be a game changer, listing three key areas in which business have identified that a financial audit can be additionally used.
Underpin other company audits
The accountancy department is not the only one that completes audits, and understanding how these operate makes sense for a financial audit.
One audit can also act as a vital support to others though, with one firm in the aviation industry reportedly discovering a non-compliance issue when auditing expenses. This should have been noticed in the audit by the legal department and, if not spotted internally, could have gained traction in the media.
Analysis and knowledge sharing
As much as different auditing teams can help one another with the workload, the sharing of analysis can also have great benefits. It can help a ‘constant auditing’ culture be introduced, helping improve working practices in the short and long-term.
Outsourced accountancy for auditing
Accountancy as a profession and auditing as a career have both sometimes been given a bad rap in society, with jokes often made at the workers’ expense. However, as the importance of their role in industry becomes ever clearer and more clearly defined, that landscape is changing.
This is helping to attract even more talented people to the profession, many of whom are being recruited by outsourcing accounting services. These professional teams are subsequently sent into client premises, helping to improve the lot for SMEs across the country.
Tighter controls
The rise of internal audits has been recognised by the body representing the industry. The Chartered Institute of Internal Auditors has commissioned a report that reportedly urges firms to take the implementation and results of internal audits seriously.
The chief executive of the body, Dr Ian Peters, said:
“Internal audit has a considerable overview of the whole organisation and it is one function most likely to be able to spot something that’s not right.”
He went on to say that by paying heed to the findings of the audit, firms can put in place policies, processes and systems to ensure company targets and accountability are being achieved.