Internal auditing the evaluation of internal controls of the company, the risks involved in financial reporting and bookkeeping as well as data collection and entered in books of accounts. An internal audit provide management and board of directors with vital information about several aspects of the company’s activities and help them move forward with plans to build business and increase profits. It is the internal auditor’s responsibility to identify inefficiencies in company’s controls, policies and procedures implemented and the financial systems. After the evaluation and analysis, the internal auditor is required to prepare financial reports as well as tactics and strategies for improving the internal controls and management of business. Internal audits are very valuable tools for assuring a business’s management is following a correct path to business growth and profitability. A company’s utilization of resources can be evaluated to promote most efficient consumption of resources.
Iinvestors sometimes require internal audits to ensure the financial support they provide is being properly utilized and that the risk to the investment is being managed. Anytime a company’s management suspect employees of improper actions or if outside threats are suspected; an internal audit can identify the risks and suggest corrections or defensive measures It is the job of the internal auditor to maintain effective controls to avoid any potential fraudulent activities as well as review all the controls in terms of costs and benefits. The internal auditor must review the consistency and honesty of financial information and the means of identifying, measuring, classifying and reporting such information.