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General Business: How To Perform An Internal Audit

One of the most fundamental operations conducted on every businesses is the internal auditing, which helps identify and monitoring the internal business procedures within a company or business. When performing internal audits, the organization is assisted to identify more gaps and in their business operations, leading them to identify more opportunities for improvement.

Internal audit is also an approach of audit operations that is made inside the organization to evaluate the agreement of the internal procedures and its systems. But the main reason of performing regular internal auditing is to ensure that the company’s protocol and procedures are still being followed as standard procedures of the organization, and then after, these reports are being submitted to the head management for any protocol changes and compliance.

Yet it is possible that the auditing procedure can either be performed by any internal resources, or even by an external resources or third party providers. But before choosing an external agency, the company must make sure that the external agency is one who is skilled in auditing and has an organized internal auditing procedures that would greatly help the company. However, the purpose of the entire internal auditing procedure is not to expose the mistakes of the specific company, rather to identify areas for improvement, which gives the company the opportunity to have and overall growth. When one company has a regular internal auditing of their system and procedures, the company has more opportunities to maintain and enhance the quality of their products and their compliance to their protocols requirements.

Moreover, internal auditing certainly needs a lot of resources for the entire process to be done, and might as well the frequency of the performance can be done daily, or weekly, monthly or yearly. You will be able to find out here the basic steps in conducting internal auditing.

First and foremost, list the areas of the company that need of any auditing. List the departments and their functions that need auditing by making use of the procedures and policies made by the company.

Next is to determine the frequency of the internal auditing based on the company’s need. Departments who just need to be audited annually or quarterly are those that need the auditing of their documents and records, while manufacturing processes need daily quality control.

The next step is to have a structured approach by marking the schedules of auditing on their own business calendars. This keeps their work to be done consistently and done regularly.

It is also important that the auditor is very skillful and knowledgeable about what to be reviewed about a specific area, to have an efficient auditing process.

Lastly, document all results and differences and then report them to the head management for any immediate action and responses.

Source: https://www.wsj.com/