The Internal Audit Function
According to the Institute of Internal Auditors,
Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations.
The definition makes it clear that the main role of the internal audit function is to assist an entity achieve its objectives through value addition to the internal processes and operations
The Value Added is established from the evaluation of systems, processes or products’ performance in relation to set standards, targets and expected outcomes. Both positive and negative results of the performance evaluation help an organization to plan future action whether to maintain the good performance or to correct deviations.
In other words, internal audit is a more formal quality assessment. This is supported by ISO 9001 2008 which identifies Internal Audit as a quality monitoring and measurement tool. The audit function checks actual performance for conformance and compliance with established guidelines and standards. Non conformance and deficiencies are noted and possible recommendations proffered.
Internal Auditing benefits organizations in so many ways. From a quality management perspective, the existence of an audit function gives management confidence that they will be assisted to evaluate quality by independent and objective personnel. Internal Audit is not enemy but a friend to senior management who are the audit client in any case. Those organizations with a tone at the top that embraces internal audit actually utilize it meaningfully rather than as a policing department. If viewed as a policing department, surely internal audit will be unwanted by managers whose areas are audited.
Another benefit is that customers and the market put confidence and trust in organizations that practise good corporate governance. By having internal audit function an entity would be attesting that it strives to ensure best quality in product and...