Adding Greater Value Through Internal Audit
Internal audit is an essential component of any organisation that evaluates and improves the effectiveness of risk management, control, and governance processes. However, with rapidly evolving business and regulatory environments, the traditional role of internal audit is no longer enough to ensure long-term sustainability and success.
We explore how the internal audit team can add greater business value through strategic alignment, innovation, and collaboration. Join us as we dive into the world of internal audit and uncover how it can drive organisational growth and success.
5 Ways Internal Audit Can Close the Value Gap
Audit committees and Chief Audit Executives consistently look for ways to improve operations. One function that plays a crucial role in driving these improvements is the internal audit function. While traditionally tasked with identifying risks and ensuring compliance, internal audit teams are increasingly looked upon to drive greater business value beyond regulatory compliance. Here is how the internal audit team can improve their contribution to close the value gap:
Improve the value of feedback
There is an opportunity for internal audit to showcase its value to the organisation by addressing the many non-financial risks threatening organisations today. Although challenging, the internal audit team should rise to the occasion by enhancing competencies, updating processes, and maintaining independence. This will enable them to become more agile and better equipped to meet the organisation’s evolving needs by providing consistently valuable feedback.
Focus on concise information
The importance of presenting a clear and concise picture of the organisation’s risks and controls cannot be overstated. Improving communication by considering the quality, frequency, style and method of communication used by internal audit should be a primary focus. Redefining how information is relayed can help ensure that valuable insights are not missed or ignored, leading to better decision-making and improved business success.
Prioritise skills development
Expanding the audit plan into key areas beyond finance and compliance is the most significant way for internal audit to expand their value to the organisation. Objectively assessing team strengths and weaknesses, being open to new hires, expanding training, and co-sourcing will allow internal audit to raise staff competencies. This will create the opportunity to deliver high-quality services that meet the audit committee’s expectations, fostering increased value and driving success.
Provide independent assessments
Boards and audit committees often need to navigate through cluttered information to arrive at what is most important. This is where internal audit can improve functions to deliver unmatched value. It is essential for internal audit to take a proactive role and provide an informed and independent assessment of the organisation’s risks. By doing so, the company can improve its operations and achieve its goals, while internal auditors can gain deserved recognition as essential contributors to the organisation’s achievements.
Maintain professional harmony
It is important to maintain a professional and respectful environment. While audit committees prioritise independence, they are also uncomfortable when internal audit faces disputes. To navigate a delicate balance and ensure that audit committees can perform their roles effectively, it is essential to communicate in a positive and constructive manner, focusing on facts and objective analysis, when communicating disagreements with management. By working collaboratively, audit committees and internal audit can support one another’s objectives and foster a positive working relationship.
In today’s rapidly evolving business environment, it’s becoming increasingly vital for internal audit teams to adopt agile approaches and prioritise stakeholder engagement to remain relevant and impactful. With the right mindset, skill set, and support, the relationship between internal audit and the independent audit firm can evolve into a strategic partnership that can drive long-term sustainability and success.
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