Given the steep rise in employee fraud and embezzlement, the importance of Internal Business Auditing has never been more vital.
Whilst there are insurance policies, such as Management Liability & Crime, that provide Indemnity for some of the exposures; the reputational damage, together with the disruption to businesses makes Internal Business Auditing, an important part of good business acumen.
Open and involved internal auditing makes all management and staff fully aware of the emphasis placed on this process by the organisation. This will then result in cultural changes that should flow into “open” and “transparent” processes where staff and management alike are protected.
It’s imperative that audit results are shared not only with management but together with all business stakeholders so they are aware of not only the processes but also the findings and required actions to amend or correct same.
The results of all audits should be recorded so that they are easily comparable to future audits and ensure that required corrective measures have been completed. In an ideal world, quarterly or bi-annual auditing greatly increases the ability to discover and then rectify any shortfalls discovered.
It’s important to not only audit for financial purposes but to also include other areas that require strict compliance. Maintaining updated registers, such as, breach; complaints; data breach help to assist the auditor. Other areas that should be considered are:
Company outsourcing procedures; succession planning, business continuity; annual leave and other staff related functions.
Any company that operates a trust, auditing, both internal and external are mandatory. Strong audit processes must include:
- Checking of banking and financial statements
- Trust bank account reconciliation
- Joint signatory compliance
- Debtors and creditors continued analysis.
Whilst auditing doesn’t 100% guarantee no problems arise it greatly reduces the chances of prolonged and extensive illegal activities remaining undiscovered.