For many, the word “audit” conjures up images of tax auditors camping out in dark offices or reading intimidating letters from the IRS. But, the reality is that an audit — more specifically, an internal audit — can be an incredibly useful tool that business owners and executives can come to love.
Typically, internal audits cover the broad areas of governance, risk, controls, and compliance. The resulting data, strictly for internal use in evaluating a business’ strengths and weaknesses, can help validate whether a company:
- operates as designed,
- manages its risks effectively, and
- complies with applicable regulations and laws.
Companies today do business in a complex and fast-changing world. The rapid pace of technology improvements brings with it significant technology-related risks — such as security, business continuity, and data integrity — that an internal audit can bring to light. Likewise, your financial statements are only as accurate as the accounting data that goes into them. An audit of your accounting function can help ensure the timely, accurate reports you need to make informed business decisions.
However, having sufficient staff and expertise to conduct a meaningful, regularly scheduled internal audit can be tough for smaller companies. Increasingly, family and closely held businesses are choosing to outsource — or “co-source” — internal audit functions to a CPA or consulting firm. These knowledgeable professionals join the internal audit team to help protect the company and reduce risks.
Benefits of Finding the Right Internal Audit Firm Match
Finding the right internal audit firm can bring some significant benefits, including:
- Access to advanced analytics. An outsourced audit partner may be able to perform more sophisticated risk analysis and yield advanced data analytics backed by actionable insights.
- Leveraged skills. Accounting firms, for example, have a larger talent pool and can leverage skills from across the organization. They also typically have robust methodologies and audit tools in place from which your organization can benefit.
- Independence. An outsourced audit team offers the highest level of assurance and objectivity — something that audit committees and boards of directors like to see.
- Cost savings. Outsourcing moves the internal audit from being a fixed cost to a variable cost. Because the outsourced team does not include full-time employees, the client does not have to pay benefits, salaries, or other typical employee expenses.
- Knowledge transfer. Your in-house audit team members benefit from the knowledge transfer that occurs when working with outside professionals, thereby enhancing their competencies.
In the end, effective internal auditing can bring a systematic, disciplined approach to managing your business, allowing you to see how it operates and how you can improve it.
Our cross-functional team of trained internal audit advisors includes CPAs, IT consultants, and forensic accountants who can collaboratively strengthen your business while mitigating risk. Contact your local CRI office today to learn more about how our internal audit services – coupled with our in-depth industry expertise – can help you boost your bottom line.