Internal Auditing – A Key Cornerstone of Corporate Governance
The key for a solid understanding of the role and depth of internal auditing and what internal auditors can deliver, lies in its very definition as determined by 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. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
Internal auditing is one of the cornerstones of corporate governance, along with the board (including the audit committee), senior management, and external auditing. When all four cornerstones work in harmony with healthy interdependence, internal controls are strong, reporting is accurate, ethics are maintained, oversight is effective, risks are mitigated, and investments are protected.
Due to its unique position within an organization, the internal audit effort provides audit committee members with valuable assistance by giving objective assurance on governance, risk management, and control processes. To deliver on this, the internal audit activity must be adequately resourced, professionally staffed with experienced and qualified persons, and comply with the internationally recognized framework for internal auditing.
The Institute of Internal Auditors (IIA) International Professional Practices Framework (IPPF) is the authoritative guidance on the internal audit profession. Containinginternationally consistent mandatory and strongly recommended guidance for the practice of internal auditing anywhere in the world, it also provides a structure for the internal audit profession’s technical guidance that no internal auditor could afford to ignore. This new IPPF features improved clarity, increased transparency, measurable accountability, and a defined cycle of review for all guidance. Essentially, this conceptual framework comprises:
- The official Definition of Internal Auditing;
- The IIA’s Code of Ethics;
- The International Standards for the Professional Practice of Internal Auditing or IIA Standards;
- Practice Advisories;
- Position Papers; and
- Practice Guides.
The first three items are mandatory while the last three are strongly recommended guidance.
Board members are increasingly turning to internal audit for expert advice on ethics, whistle-blowing, risks, and controls. The reason: by the very nature of their work, internal auditors spend time to understand an organization’s culture, operations, systems, industry, and the business itself – a position that gives them visibility to all aspects of the operations of an organization.
The increasing thrust that internal auditing is providing to improving governance, risks, and controls and the general positive perception of the key role internal audit plays in a successful organization have all combined to enhance the profession’s profile.
Within the above context, Lal Balkaran, a well-respected veteran with almost twenty five years experience as both an internal audit practitioner and academic offers the following quality internal audit and related services:
- Establishing an Internal Audit Activity
- Quality Assessments
- Audit Manual Compilation
- Audit Universe Development
- Risk-based Audit Plan Development
- Training and Development of Audit staff
- Streamlining reports for the Audit Committee
- Operational Audits of Functional Areas
- Audit Report Writing
- Information Technology Audits
- Financial Audits
- Fraud Auditing
- Development of Charters
- Benchmarking, Best Practices, and KPIs
- Corporate Governance Reviews of the Board, Its Committees, External Audit, Internal Audit, and Senior Management
- Aligning the Internal Audit and Risk Management Efforts
- Strategic Risk Assessment
- Risk Universe Development
- ERM Reviews