An internal audit is the evaluation of all aspects of an organization by an internal auditor. One of the biggest benefits of an internal audit is that it facilitates more effective management of the organization. An internal auditor would be able to point out the weaknesses of an organization. It increases financial reliability and integrity. So it helps to maintain better management, proper supervision, and effective control.
Advantages of Internal Audit
The advantages of internal audit are as follows:
1. Staffs remain alert because their work shall be checked by the internal auditor. It will help point out the areas in which resources are being underutilized or wasted. So, accounting remains correct.
2. Internal audit helps to detect errors and frauds and provides suggestions to improve them which helps the management to take corrective action. This also means that if they are not on the correct path, this will help them change course and correct their mistakes immediately.
3. Internal audit detects the misuse of resources in time which helps to reduce unnecessary expenses. The process of this audit gives the organization a unique opportunity to conduct a review of the performances in the ongoing year itself. The functioning of the current year could be examined in detail.
4. Internal audit checks the efficiency of staffs which helps to increase the efficiency of them. This is because there is the fear of their mistakes being caught by the internal auditor almost immediately. The internal auditor is then only required to apply test checks in order to complete audit duty.
5. Internal audit checks the books of accounts, detect errors and frauds and helps in its correction which makes the act of final auditor easier. It is important to keep a check on and observe the activities of all the departments and all of their employees. It helps to increase their efficiency and also helps to minimize errors.
6. Internal audit increases the morale of honest staff because the evaluation of the performance of any staffs will be made at any time. Ultimately increases accountability within the organization. It helps to increase operational efficiency and productivity.