Many businesses make use of auditors but they are not entirely sure about what exactly the role of an internal auditor is. They are seen as an independent advisor who looks at your current business and assess whether there are any problems, and if you are following all the rules and guidelines you need to. They are also seen as the person who analyses your financial statements for accuracy and validity, and making sure that your business meets its objectives.
The role of an internal auditor goes beyond that. Firstly they need to evaluate and advice managers on all levels; assessing the risk management culture of the organisation and evaluate the effectiveness of management’s policies and procedures. They need to identify key activities and risk factors and then assess their significance and overall impact. The techniques that an internal auditor uses will change based on current business and economic conditions, and this is lately more of an proactive, risk based approach to help an organisation improve. This also helps them to anticipate possible future opportunities and risks, and advise management how to act accordingly.
Internal and External Auditors
There is a difference between internal and external auditors, and many people are not aware of this. An external auditor will focus more on the financial aspect, whereas an internal auditor has a broader scope to focus on. External auditors have an obligation towards shareholders and the public in terms of accuracy of financial statements and reports; internal auditors have a duty towards senior management on the state of governance, risk management and control within the organisation.
External auditors will therefore focus more on finance and accounting, where internal auditors will focus on the organisation, and its functions and operations. An internal auditor is part of the organisation but they are independent of management, as they provide an internal audit report to the audit committee. An external auditor is independent to the organisation and has a statutory obligation.
Colin Smith & Co has a team of professional auditors that can provide an internal or external audit of any organisation. They have a unique approach that provides value and quality to their clients; they strive to deliver efficient and relevant audits that will benefit both the organisation and its shareholders.