There is a famous proverb that “Prevention is better than Cure” so Internal Audit is better than Various Statutory audits. Internal auditing is an independent, objective assurance and consulting activity designed to add value to and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes
Internal audit is performed to give assurance to top level management that the risk associated to business are identified and managed properly. It is conducted to provide assurance that management of an organisation has an ability to manage risk effectively. It also ensures that governance and internal control processes are operating effectively.
Benefits of Internal Audit:
1. It reduces the possibility of fraud.
2. It serves as an early warning system that enables organisation to identify deficiencies and apply remedies on a timely basis;
3. It improves efficiency & increases financial reliability and integrity.
4. It ensures timely compliance with laws and statutory regulations.
5. It keeps check on the internal control of organisation.
Internal Audit is applicable to:
a. Every Listed Company
b. other unlisted (Public & Private Limited) Companies having specified turnover, share capital or borrowings.