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Internal Audit Service is an independent, objective assurance and consulting activity intended to add value and develop an organization’s operations. Internal Audit helps a business to achieve its objectives by bringing a methodical, meticulous, and disciplined approach to assess and enhance the effectiveness of risk management, control, and governance processes.
Internal Auditing is an activity carried on by the internal auditor to meet the management requirements of information. It is an independent appraisal activity within an organization for the review of operations as a service to the organization.
Internal Auditor’s role is to provide Management with independent assurance on the organization’s internal controls, risk management strategies and governance are operating effectively. Internal Auditors’ function includes supervising, evaluating, investigating, and analyzing the risks & controls; checking and ensuring information and compliance with policies, procedures, and laws. Internal Auditor will assess the achievement of goals and objectives set by the Senior management. In the case of short of stated goals, the auditor will identify process gaps and make suggestions for improvement for bridging the same.
Internal Audit Services in Dubai, UAE
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The objective of Internal Audit is to evaluate and improve the effectiveness of governance, risk management, and control process. The overall objective of internal auditing is to assist all members of the management in exuding their responsibilities. Also, to help them with objective analysis, recommendations, and relevant comments concerning any phase of business activity wherein they can be of service to management. In short, Internal Audit will help the management for:
Assessing the Risk involved
Assisting management in the evaluation of internal controls
To bridge the gaps by strengthening the internal controls and to accomplish organizational objectives
Evaluating process performance and managing risk effectively
Help to find the deviations from KPI and to get proper recommendation/ suggestion for improvement
To verify the fulfilment of plans and sound business requirements and also to focus on objectives
To evaluate evidence in connection with the situation and issues
Risk Assessment Matrix (RAM) is used to define the risk category of each process and sub-processes or areas under the scope of Audit. The level of risk is defined considering the likelihood or probability against the category of consequence severity.
A detailed Audit plan will be drafted in discussion with the Management and areas to be prioritized depending upon the risk category & also the nature of the function. Broad areas to be Covered (Can vary depending on the industry and choice of Management)
Revenue
Procurement of Goods/ Services
Inventory
Logistics
Information Technology Infrastructure.
Finance
Fixed Assets
Statutory Compliance
Admin & general Operations, etc.
On Approval of the Audit plan, fieldwork is executed by performing a walk-through, enquiry, questionnaire, etc. Clients are kept informed of the audit process and the status of the audit.
Once the execution stage is completed, all the observations are collated in a draft report. The risk rating is allotted to all observations with the responsibility of the concerned function. This report is discussed with the Management or Authorised personnel to highlight the issues, concerns, and deviations.
As it will be a continuous process, the scope does not end with the submission of reports. The follow-up action taken report (ATR) will be represented to the management on the status of observations and its closure status. Any long-pending observations critical to the business will be bought to the notice of the management to set a further course of action.
Independent review and appraisal of the organization’s financial and relevant operational activities will be better when the internal auditor is not part of the organization and is independent.
People usually ask
Internal Audit is a combination of Assurance & Consulting Services. Assurance service involves the examination of evidence to express an opinion on the Entity’s systems, operations, functions, or other matters. Consulting service involves adding value & providing recommendations on improvements for the Entity’s Internal Controls, Risk Management & Governance.
Internal Audit can be performed by the Internal Audit team (employees of the Entity) or by External Audit Firms. Internal Auditors reports to Audit Committee or Board. Senior Management can also initiate Internal Auditing.
Internal Audit is not mandatory in the UAE. However, it is best practice to have Internal Audit as it will add value and improve Organization’s Internal Controls, Processes, Risk Management & Governance. Internal Audit will also reduce the risk of fraud due to regular checks and strengthened controls & processes.
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