What Are Internal Auditors & How Can They Benefit Your Business?
In the digital age, service industries like finance and ICT are becoming increasingly reliant on two things: technology and tight operational processes. That’s because businesses operating within these industries are tasked with handling sensitive information every day. And when it comes to securing this personal data on behalf of individual clients and other companies, there’s just minimal acceptable room for human error. So how do you ensure that your business isn’t at risk of making mistakes that ultimately mar your company’s reputation and trustworthiness?
For millions of companies across the globe, the answer to this age-old question is just investing in internal audits to help maintain regulatory compliance. This can mean maintaining compliance with industry standards, internationally recognised ISO standards, federal and state laws, and in alignment with internal company policies and procedures.
It’s also easier than ever to become an internal auditor, with internationally certified internal auditor training courses available across the globe. There are even online courses available that allow professionals to complete their internal auditor training at their own pace.
So should your company make this investment and secure its own internal auditor?
We’ll be providing an in-depth overview of what’s involved with internal audits below, as well as outlining exactly how having a trained internal auditor can help your organisation stay on top of its operational responsibilities to its staff, customers, and stakeholders.
What is an internal auditor?
The simplest definition of an internal auditor is an employee who has been tasked with objectively evaluating your organisation’s operations and processes. Internal auditors are generally concerned with identifying any compliance concerns, business risks, and inconsistencies within company records (i.e. any signs of fraud or crimes like insider trading).
As we mentioned, internal audits can be conducted in adherence with a variety of different referential standards and criteria, be it industry-specific or international standards like those developed by the International Organization for Standardization (or the ISO). To ensure that your internal audits are conducted correctly, internal auditors are required to attain certifications or other qualifications in conducting each particular type of audit they’d like to carry out on your business.
For example,
if an internal auditor was looking to conduct an ISO internal audit, they would naturally need to be formally trained to understand all of those ISO standards in question. Similarly, those looking to conduct financial audits would require a formal background in accounting and financial auditing.
What’s the difference between an internal and external auditor?
If none of your staff are certified to conduct internal audits, then you can still conduct audits for your business with the support of an external auditor. As you may have guessed, internal auditors are company employees whilst external auditors work for a third-party entity, typically an audit firm or accounting firm.
Whilst internal auditors are hired by business managers, external auditors are usually selected by shareholders, with findings from external audits being sent directly to company shareholders. These independent audits are typically used to provide company shareholders with a transparent and objective view of the company’s operations and performance. For this reason, external audits are most likely to be conducted during company valuations and when any major operational or hierarchical changes have occurred.
Many business owners prefer conducting internal audits as they can be carried out autonomously and with minimal ongoing expense (once your internal auditor has been fully trained). As internal auditors are company employees, they can also provide a greater level of insight into the business from an employee perspective. This perspective can be valuable when it comes to correcting any identified compliance issues or business risks.
The benefits of conducting internal audits
From what we’ve shared already, some of the more notable benefits of conducting internal audits may already be apparent. For instance, routine internal audits can help ensure that your business’ operational processes are well-developed and implemented. And for organizations that are seeking to become ISO certified, conducting preliminary internal audits can help ensure that your company’s gap analysis returns minimal points of improvement, which can then see your certification process going a lot smoother and potentially even faster.
In the context of digital transformation, conducting routine internal audits can also be a quintessential component of a company’s cybersecurity strategising. This is largely due to the fact that cyber threats are constantly evolving, and employees must be routinely trained to ensure that they work in alignment with your company’s cybersecurity policy and outlined best practices. Securing ISO 27001 certification for information security management systems and working to stay compliant with this international standard can also help your company organically maintain strong digital security and data management processes.
Maintaining a proactive approach to ensuring regulatory compliance may even help companies reduce their risks of being subject to litigation or accruing negative customer feedback and online reviews. In this regard, conducting routine internal audits can help preserve your company’s image and cultivate a strong reputation – which can in turn, help grow both your customer retention and acquisition rates as well.
How to become an internal auditor
With all the benefits we’ve outlined today, your next question may be how you can secure a trained internal auditor for your company. As we mentioned earlier, becoming an internal auditor is easier than ever before, thanks to the development of online auditor training courses. With these resources and training opportunities available, business owners can invest in internal auditor training for select employees, providing them with an opportunity to upskill alongside cultivating their skills as an asset to your business.
Business owners also have the option to hire a dedicated internal auditor rather than train an existing employee. When hiring dedicated internal auditors, it’s recommended that business owners examine the accreditation and qualifications of all candidates. Some candidates may have bachelor’s degrees in business or finance, whilst others may have degrees in other relevant fields of study like information technology. Alongside this, all candidates should have evidence of completing auditor training courses and proven experience of providing these services, either as an internal or external auditor.
Employees who are looking to upskill independently and gain accreditation as an internal auditor can seek out auditor training courses themselves and discuss the possibility of providing internal auditing services with their employers. If you’d like to make a career out of providing auditing services, then you may opt to complete courses that directly explore the auditing process in relation to all the standards and laws you’d like to offer your services in.
As business technologies and processes become more dynamic and crucial to the scalability of your enterprise, internal audits can no longer be considered a luxury. They are in short, a necessity for growth-oriented businesses. With that, business owners are encouraged to invest in internal auditing now to ensure that they can keep their organisation poised to become a fierce competitor within their industries and a trusted entity within their communities.
