OUR THOUGHTS ON:

If You Could Only Make One New Investment

Risk Advisory/Internal Audit

By Nicole Saldamarco

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?

© 2014 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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