Example Of Research Paper On Recommendation For Internal Auditor

Type of paper: Research Paper

Topic: Audit, Politics, Internal Auditor, Control, Organization, Business, Management, Internal Control

Pages: 3

Words: 825

Published: 2020/12/03

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An organization is a system which has objectives set by its management or proprietors. Internal control is a necessary mechanism helping achieve the business objectives (Root & Grumman, 1998). If there are shortfalls, timely corrective measures have to be taken in order to get things back on track. Internal auditor is the person in the company, reporting to the management on how the internal control system works. In smaller organizations the owner or the manager can directly supervise the processes. However, as an organization grows and processes become more complex and sophisticated, the visibility from the top deteriorates. It would not be uncommon for losses, material or reputational, to happen. The internal audit brings a systematic approach to internal control system by reviewing the business processes and reporting back to management. Some of the benefits which internal auditor can bring to organizations are discussed here.

Safeguarding of assets

A good example of the work of internal audit could be invoicing process. It is evident that the objective of the process is to bill timely and completely for all services or products sold by an enterprise. But it may happen that due to work pressure, oversight or even intentionally, some invoices got delayed or even has not been issued. By detecting such a problem and reporting it to management for correction an internal auditor adds value to the business. In this example, by improving the invoice issuance process the internal auditor would be able to protect receivables. Similar activities can be done for reviews of petty cash, checks, control over inventory etc.

Improving of control culture

One positive impact of having internal audit function on the business environment is that control culture in the organization is likely to improve. The staff, knowing that someone will review their work, would be deterred from wrongdoing or perhaps do what they should more diligently. In addition, the internal audit may facilitate putting in place the policies and procedures where necessary to improve controls in certain areas.

Compliance with regulations

An internal auditor is well positioned to review how organization complies with applicable regulations such as reporting, taxation, health and safety etc. Of course, it cannot be expected that the auditor is expert in all those areas, but the auditor may review how and whether relevant specialists perform their functions. The auditor would check sample of their work to see whether processes function as intended. In addition to it, the internal auditor may identify weak spots where the organization fails to comply with the applicable rules and recommend the remedy.

Management has independent reporting channel

It is important for management to know what is going on. Certainly, management receives information through the normal reporting channels. However, it may be biased and not objective as the reporters may show certain matters in favorable light. By having independent auditor report directly to the management or proprietors on their findings and risks detected, more objective and relevant information will be received at the top and corrective actions may be taken timely.

Advisory and consulting on risk related matters

On one hand internal auditor is distanced from the business processes, but on the other hand he is part of the team and knows what takes place in business. This role ideally places the internal auditor to advise and consult business on risk related matters, such as design of control procedures, systems etc. Rather than dealing with problems later, after they come to pass, this activity helps prevent errors from happening beforehand.

Potential reduction of audit bill

The external auditors are allowed to rely on the work of internal auditors, if they find it satisfactory. This leads to decrease of their hours and bills.

Reference

It is recommended to consider XXX for the vacancy of the internal auditor. This person has an accounting experience, which is the foundation of the work in controlling area. In addition, the person also worked as the internal auditor in the same industry as this organization. This equips this person with a necessary knowledge of the business environment as XXX would know where problems may happen. One additional advantage in the person’s background is that he also worked for an accounting company. This allows him to know what external auditors expect from the company.
References
Root, S. J., & Grumman, N. (1998). Beyond COSO: internal control to enhance corporate
governance. New York, NY: Wiley.

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WePapers. (2020, December, 03) Example Of Research Paper On Recommendation For Internal Auditor. Retrieved October 26, 2021, from https://www.wepapers.com/samples/example-of-research-paper-on-recommendation-for-internal-auditor/
"Example Of Research Paper On Recommendation For Internal Auditor." WePapers, 03 Dec. 2020, https://www.wepapers.com/samples/example-of-research-paper-on-recommendation-for-internal-auditor/. Accessed 26 October 2021.
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"Example Of Research Paper On Recommendation For Internal Auditor." WePapers, Dec 03, 2020. Accessed October 26, 2021. https://www.wepapers.com/samples/example-of-research-paper-on-recommendation-for-internal-auditor/
WePapers. 2020. "Example Of Research Paper On Recommendation For Internal Auditor." Free Essay Examples - WePapers.com. Retrieved October 26, 2021. (https://www.wepapers.com/samples/example-of-research-paper-on-recommendation-for-internal-auditor/).
"Example Of Research Paper On Recommendation For Internal Auditor," Free Essay Examples - WePapers.com, 03-Dec-2020. [Online]. Available: https://www.wepapers.com/samples/example-of-research-paper-on-recommendation-for-internal-auditor/. [Accessed: 26-Oct-2021].
Example Of Research Paper On Recommendation For Internal Auditor. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/example-of-research-paper-on-recommendation-for-internal-auditor/. Published Dec 03, 2020. Accessed October 26, 2021.
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