Evolving Roles of Internal Auditors in a New Economic Environment

Economic Environment 300x225 Evolving Roles of Internal Auditors in a New Economic EnvironmentToday’s organisations are facing the heat of global economic crisis. The management, leaders and board of directors over the organisations are adopting fresh approaches at virtually all aspects of businesses. Their primary aim is to increase productivity, improve processes and systems at the same time staying in control. The role of internal auditor has also evolved considerably over the years in response to the changes in businesses. The internal audit professionals have to comprehend business challenges and an organisation’s main objective. They ensure that the organisation’s control system are effectively addressing those changes and managing the emerging risks.

While the internal auditors are still responsible to provide an independent assurance; recent trend is that they have to work more closely with business and deal with matters that have greater impact on the company. Now, the internal audit has a more critical role in business. It actually helps companies to deal with the changes. The internal auditors identify, monitor and manage risks that emerge with every new business process, initiatives and procedures. They make use of specialised data analysis techniques in audit, detect frauds and supervise compliance areas.

Technological dependence

Increasing use of technology especially for audit analytics, continuous monitoring, auditing and fraud detection are among the top priorities for modern day auditors. They believe that management of risks and effective control of the systems are necessary for performing businesses. In many departments, the unplanned testing of transactions is replaced by scheduled automated testing routine. This has increased effectiveness and efficiency of the audit process. It is possible to timely identify the frauds and errors and overcome them.

Once a business has identified the importance of analytic technology and understood the benefits of continuous auditing, to reap those benefits it will like to adopt techniques, continuously monitor transactions and control systems. These considerable changes have created enormous demand for internal audit professionals. It is definitely a good time for those seeking a career in internal audit or in quest of further career advancement in this profession. The modern auditors have to build stronger understanding of risk management and effective internal control.

The basic functions of internal auditors can be divided in following ways:

Managing risks

This is the major responsibility of internal auditors at present. They have to work with management to assess strategic risks. Every companies witness undesirable situations and outcomes, moreover there are significant risks in implementing new technologies and processes. Those companies will emerge successfully that can control its risks and take adequate advantages of the opportunities. It is the job of the auditors to closely study the company, industry and market as a whole to identify risks and opportunities.

Reporting the operations

Internal auditors on the basis of their research know how the companies can be operated efficiently and effectively. Equipped with the overall view of the company’s processes, an auditor can make suggestions regarding unnecessary duplication of work and responsibilities. They can also refer to needlessly difficult processes. The internal auditors assist an organisation or business to perform in a better way.

Detecting frauds, errors and non-compliance

Companies always expect that their employees will neither be involved in any kinds of frauds nor will be unprofessional. However, internal audit investigations can discover such behaviours. Even it is not unnatural the employees commit errors or there are some non-compliance issues.

An auditor can detect such malpractices before it becomes a threat to the company. The use of audit analytic technology has enabled to evaluate complete financial transactions that provide further insights into frauds, non-compliance and errors. Based on their investigations, the problem can be rooted out from the company.

Ensuring that the controls are in place

The companies have to ensure that the business controls are in place. An internal auditor determines whether a control is suitable or not. They recommend if the control is too strict or too loose.

Those aspiring for an internal auditing career have to concentrate on shaping up an all-round career. Although those with a degree in finance, economics, auditing and business administration can step into this profession; top companies will look for candidates with business acumen, knowledge of IT and strong communication abilities. Compliance is another major area of concern for these new age businesses. Therefore, those with knowledge in this compliance area are in a better position in this job market.

The role of an internal auditor is complex and challenging. Hence, most of the time companies prefer candidates with relevant experience. It will work in your favour, if you manage an internship in the same area while you are studying.

Mark Jonathon is a recruitment consultant. He is also a freelance writer who writes on topics like risk management jobs, auditing jobs, compliance jobs and so on. While writing on these topics he takes inspiration from the website of Barclay Simpson Singapore. 

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