This blog is written by Mr. Omar Rafeh Chughtai, Associate Internal Audit. This blog provides view of an individual based on personal experience. Please rad this blog of provide your valued comments.
Scope of Internal Audit
An internal audit measures a company’s compliance with external and internal standards. With a checklist for an internal audit of a company, a small-business owner can regularly check the company’s compliance with its policies and procedures. Working as internal auditor for over 8 months I’ve learned the Internal audit highlights noncompliance issues so the business takes corrective action without involving regulators. As I explained the above the aim of the internal audit, I will now explain which business functions require audit more importantly
- Management Audit
The management audit validates the company’s structure and strategic plan. The auditor reviews the company’s goals and objectives to ensure that the framework of the organization supports its goals. Each individual employee’s goals should relate to the overall goals of the company. The auditor also analyzes the company’s organizational charts and ensures that employees are accountable to their managers for their performance and that the managers are accountable to the owner.
- Operations Audit
An operational audit measures the performance of the core function of the business. Operational audit checklist include an assessment of the company’s on-time delivery of goods and services; whether the company has adequate contracts in place with its vendors, how the company maintains relationships with its customers and so forth. The auditor also gauges the effectiveness of the company’s sales staff and that they periodically update their knowledge of the market.
- Finance Audit
The financial audit focuses on regulatory requirements such as corporate governance and tax filings. The auditor verifies that the company has secured the necessary licenses and permits to conduct its business. The auditor inspects the company’s accounts to ensure that they contain accurate information that is supported by source documents. A financial audit also verifies that the company accurately calculates each employee’s wages and confirms that the company provides the promised benefits and makes the statutorily required payments for taxes and insurance.
Omar Rafeh Chughtai