Understand the internal audit
Many organisations lack a clear understanding of the purpose of the internal audit function – according to a recent survey conducted by Mazars, during June 2016 across 120 respondents.
Daniel Jacobs, associate director Internal Audit at Mazars – an internationally represented organisation specialising in audit, accounting, tax and advisory services – notes that the misconceptions among many businesses could be rendering their internal audit system useless.
“The survey indicated that employees generally have a negative attitude towards auditors, viewing them as ‘police’. When implemented correctly, the internal audit process should be a holistic evaluation of the organisation’s efficiency and accuracy,” explains Jacobs.
“Internal audits also operate independently from external audits and provide a written assessment of the effectiveness of the system of internal controls and risk management,” says Jacobs.
Jacobs explains that negative attitudes towards internal audits, and failure on the part of the different operational functions within the company to work together with the audit department, can have a significant negative impact on the organisation as a whole.
“Companies risk not having a clear understanding of the specific strategic and operational risks faced by the company. It also means that the systems and process changes recommended by the audit department aren’t taken into account by the various departments, who then do not make subsequent changes to their own internal control processes,” concludes Jacobs.