Benefits of Internal Audit Companies in India

Internal audit companies in India help businesses and corporations to trace and eliminate the loopholes in the functioning of several units. The purpose of internal auditing is to identify key risk factors. Internal auditing is essential to control and repair the effective areas of the company to enhance performance and productivity. Internal auditing is defined under section 138 of the Companies Act 2013. In short internal audit firm is an independent unit hired to find faults and improve the operational part of an organization.

Which company or corporate or an organization can hire an Internal Audit Company?

Internal auditors are professionals and organizations hire them for internal auditing. These professionals are chartered accountants, cost accountants, company secretary and a person who is recruiting by an organization for the purpose of internal auditing. As per the rule 13 of companies’ rule 2014, following companies need to hire an internal audit company such as:

• Listed Companies
• All unlisted companies who have:

1. Paid up share capital of 50 crores and above in the preceding financial year.
2. Turnover income more than 200 crores in the preceding financial year.
3. Outstanding loans from the bank or any financial institution in the preceding financial year.

• Private companies in which:

1. Turnover income of 200 crores and more in the preceding financial year.
2. Outstanding loans from the bank or any financial institution in the preceding financial year.

What are the benefits of Internal Auditing?

Internal auditing is essential to find out the loopholes and trace the weak areas in any unit within a company or an organization. Internal auditing gives assurance to the managers and other higher authorities that everything is functioning smoothly and any hurdle or change is removed or implemented. Internal auditor evaluates the need for change, improvement, and train the human force to deliver their best. Internal auditors are professional people who are trained to go deeply into the matter and find out the cause of matter.

Big giants and corporate cannot survive or retain profit, till the time weak areas can be treated. It is impossible for a person to keep an eagle eye on everything that why internal auditors are required to evaluate major and minor gaps in the functioning of a company.

How Internal is differ from External Audit?

External audits are performed for outsiders such as stakeholders or shareholders who reside outside the companies. On the other hand, internal audit firms in India perform auditing to inform internal people such as managers and board of director.

Inter auditors are the company employees and are liable to the company and its performance. In some cases, companies hire internal auditors who guide them about loopholes and how to fill them. While external auditors are hired by an independent audit firm which is selected by a team of shareholders.

The internal audit companies can help organizations to stick with the rules and regulation. They help businesses to provide training to their employees and throw the bad stuff out of the system to enhance overall functioning.