Managers must have good advisers in each of the areas in order to make the best possible decisions, the general manager does not necessarily have to be an expert in all areas of an entity, to help him in this task he has allies to help him about.
One of the most important in the internal sphere is the internal audit department, there is a large amount of valuable information and knowledge of the business that the management will find extremely useful, the manager must be very clear about this and make the most of it so that be an element that adds to its effective management.
There is an institution that regulates internal auditing at a global level, this is the Internal Audit Institute (IIA), Established in 1941, it is an international professional association with headquarters in Lake Mary, Florida, USA, its members work in internal audit, risk management, governance, internal control, information technology auditing, education and security.
This institution (IIA) tells us that internal auditing is: an independent and objective assurance and consulting activity designed to add value and improve the operations of an organization. Helps an organization achieve its objectives through a systematic and disciplined approach to assess and improve the effectiveness of risk management, control, and governance processes.
Internal audit is in an institution to add value, and not only to carry out internal control tasks as before this arduous work was focused, the internal audit has evolved for a long time, now it is a consulting area of great value for the management of organizations and are there to help achieve the objectives.
According to the IIA, the internal audit mission articulates what internal audit aspires to achieve within an organization. Its place in the new professional framework (IPPF) or in English The International Professional Practices Framework, is deliberate, which shows how professionals should take advantage of the entire framework to facilitate their ability to achieve the mission.
Internal audit will do its best to enhance and protect the value of the organization by providing objective assurance based on risk, advice and insight.
We understand risk as the possibility of an event occurring that has an impact on the achievement of objectives. Risk is measured in terms of impact and probability, in the area of internal auditing the risk element is vital in the development of activities.
Risk in companies must be very well taken care of, this area in the practice of internal auditing is essential, that is why the main role of internal auditing with respect to business risk management (ERM) is to provide objective assurance to the board of administration regarding the effectiveness of a company's ERM activities, to help ensure that key business risks are being managed properly and that the internal control system is working effectively.
Auditing as a profession was recognized for the first time under the British Public Limited Companies Act of 1862 and general recognition took place during the term of the Act.A methodical and standardized accounting system was desirable for adequate information and for the prevention of fraud. It also recognized a general acceptance of the need for a separate version of the accounts of small and large companies.
From 1862 to 1905, the auditing profession grew and flourished in England, and was introduced to the United States around 1900. In England, the emphasis continued to be on detecting fraud as the primary objective of auditing, then some time later. This practice was taken to the private part, which has been evolving to this day.
The internal auditor today is a comprehensive and capable professional in the business, risk, internal control, consulting, finance and other areas, who will always contribute to the achievement of the organization's objectives and will be a great ally for the continuous improvement of operations in the entity.
We must stop conceiving the internal auditor as a kind of bad policeman or inspector and understand him as a professional consultant who generates value within the organization, and this is extremely important for managerial practice.
And for those who wonder what the Consulting Services consist of, we have to, consists of advisory activities and related services, provided to clients, whose nature and scope are agreed with them and are aimed at adding value and improving processes governance, risk management and control of an organization, without the internal auditor assuming management responsibilities.
The internal audit allows us to determine if the established systems and procedures are efficient to achieve the established objectives and ensure compliance with the established policies, it also makes recommendations for the improvement of policies, procedures, systems, standards, among others. Similarly, it provides a means of providing a greater degree of delegation of authority and, if necessary, a means to facilitate the decentralization of operations, the success of the internal audit is not only hand in hand with the attitude of senior management, but also also of the degree of acceptance agreed to the work team by the medium and low levels of the company.
Internal audit also works with the future element since the current approach of management is basically oriented towards the future, so when evaluating the present administration, the future must be taken into account, that is why current decisions can be the means to consider future results, so another part of the audit is the preparation of a final report of present results and its evaluation will contribute to the achievement of the future objectives of the company.
Definitely for the management area of an entity it will be of great value to have an internal auditor, this will give an objective guarantee and understanding of the effectiveness and efficiency of governance, risk management and internal control processes, which that will undoubtedly make the management much more effective and robust in order to achieve the objectives set.
Author: Lcdo. Michael Aular - Micdan Consulting
