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:

Evolving Role of Internal Audit

Currently, internal audit is seen as an integral part of the management process and the essential element of corporate governance. The dynamic evolution of the global economy, the complexity of regulation and the technological progress of recent years are at the source of new tools and new orientations of the development of the internal audit helping to the management and generating the added value an organization. These latest opportunities have also brought an original image of the internal auditor, with skills and ethical practices tailored to customer requirements.

In a context of increasing demand for auditor services, researchers and practitioners are thinking about evaluating the performance of a company’s internal auditors. Researchers from different countries and members of the Institute of Internal Auditors are trying to find in their studies the best ways to evaluate the intervention of listeners both theoretically and practically.

The first definition of internal audit proposed by the internal audit companies in India highlighted the financial and accounting aspects. The subsequent amendments would broaden the tasks related to management evaluation and review, highlighting the function of monitoring and evaluating the functioning and development of the organization, and finally adopted in 2001 the definitive definition of an internal audit.

The results of some research have shown that the fall in audit performance was a result of the reduced remuneration of auditors. Admittedly, the results of the audit performance analysis can be influenced by the pricing policy of companies and elements of competition. The means to assess the performance of the audit are not sufficient because they do not take into account the primary objectives of the internal review.

Internal audit is currently covering more and more business areas and is becoming an essential part of management.

AUDIT PERFORMANCE IN PRACTICE

In practice, the performance review is reduced to analyzing the relationship between the overall results of the intervention and the respective advanced investment, expressed in the form of a quotient ratio (ratio of the results to the investment) or in the way of a differential report (results compared to investments, net income).

INTERNAL AUDIT XXI TH CENTURY

By analyzing different approaches by researchers to define the performance measures of internal audit intervention, we can see that these indicators have evolved along with the role of retail audit companies and the growing demands and expectations of the beneficiaries of the review. The evolution of the part of internal audit from the purely financial position to the insurance and advisory function, which is of great importance in the enterprise management system, has also demonstrated the necessary improvement in the performance of services.

The century should provide answers to the economic problems that arise and prevent new business risks, by referring to the latest results of economic and social research, as well as those of management theory and methodology, which make it possible to program internal auditing as a new management tool.

Errors in an Audit

When the time comes to certify the Management System that we have implemented in the organization, or whether the recertification, retail audit firms in India take on a major role.

When a company receives an external or third-party audit, nerves and anxiety about not receiving “non-conformities” are present. However, and beyond the discrepancies that an auditor may encounter, there are also certain errors that can be fatal. What types of errors? Errors linked to the Audit as a proper instance.

Below are the 6 most frequent errors in a Quality Audit:

• Bad planning- The first is the first. The staff of the Quality Management System, and who has direct contact with the external Audit team, must plan this audit in detail. Doing good planning includes:

Make sure that when the auditors come, the respective sectors of the company can attend them as they should. The audit should not coincide with any other important event in the organization.

Write the detail of the agenda, and exchange it with the audit team including rest times, as well as lunches, is important.

• Assume a responsibility that does not correspond. What do we mean by this? It is a very common mistake made by the sector or the person responsible for the Quality Management System. Sometimes, the other sectors accompany or reinforce the bad concept.

The internal audit companies in India, and whatever the type, is an evaluation instance. The result is to be able to determine how far the systems depart from the provisions of the Standard. This clearly is not the responsibility of a person or of a sector. Given that the leader of the audit by the company, it is the Quality department that is usually confused with responsibility. They are two different things.

• Talk more. One of the most common mistakes. Be it nerves, or simply thinking that if you talk too much, you will show more experience or knowledge.

Auditors are specialists who have been trained to carry out the audit process. They are the ones who know what to ask and what kind of evidence they need. Intervening or trying to distract your attention is a bad idea.

• Generate unnecessary documents. Sometimes there is a clear tendency to create many documents. In the wrong way, the requirements of the Standard are interpreted or associated with the existence of certain papers.

The documents required by the Standard are strictly necessary so that the proper functioning of the defined systems, effectively occur in a safe manner.

• Adopt a competitive attitude with the auditor. On many occasions, and especially people who work in “extra” Quality sectors, they adopt an erroneous attitude.

When an auditor asks, the counterpart “feels” that they are being evaluated personally, or that it is their job that is being questioned. If to that is added the fact that an auditor begins to deepen more or asks for physical evidence of something, then the reaction is notoriously negative.

• A “Direction” little involved. Since directors are usually very busy people, and therefore difficult to locate, they are sometimes “excluded” from the instance. Everyone knows that at the Review by Management stage, and as part of the requirement of the Standard, they will be present.