What’s the likelihood that your one new investment would be in an internal audit function? Why internal audit? As organizations continue to operate lean, not only does the opportunity (and probability) of fraud increase, so does the likelihood that your sound business practices will be circumvented; and adherence to applicable regulations will slip. What drives such undesirable behavior, is that lean operating cultures tend to, over time, result in lean internal control and governance practices.
Your organization is consistently reinventing its practices to remain competitive. By-products of the changes are new or elevated risks to your business practices. Every organization, whether publicly traded or privately held, should ensure, through a system of controls and monitoring activities, that risks to the organization are being effectively measured and managed to avoid impairment to the organization’s performance, whether financial, operational or reputational in nature. Investing in an internal audit function provides your organization with resources that provide executive management and other stakeholders with assurance that risks are being managed through performance of comprehensive risk assessments and continuous evaluating and monitoring of the control environment. As noted above, monitoring of risks can become nearly nonexistent due to an emphasis on lean business practice, since management’s time is consumed by a variety of consolidated activities. Monitoring of risks moves down on the “to do” list. Internal audit can fill the risk management void with respect to monitoring business practices, controls and risks and advising stakeholders of concerns.
In addition, organizations are placing greater reliance on sophisticated business intelligence analytics to capture and measure key performance indicators in realtime. Internal audit can assist organizations in defining and providing support to apply the analytics to continuously monitor critical controls.
With the ever changing business environment, coupled with the dynamic regulatory environment, can you afford not to invest in internal audit?
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