Reasons Why the Internal Audit is Pivotal to an Operation

Written by : Fauzan Athalah

Designed by : Muhammad Fitra Filian

First thing first, what precisely does an internal auditor do? An Internal auditor is responsible for providing an independent and objective assessment of the operation, especially the effectiveness of its internal control structure. Their objective is to evaluate and improve the efficacy of governance, risk management, and control processes. This evaluation will provide members of the board of directors and senior management with assurance that will help them fulfill their duties to the stakeholders and its organization itself.

Then why the internal audit is so pivotal to an operation? Well, here are the five reasons:

  • Provides Objective Insight

The thing is, almost no one can audit their work without having a conflict of interest or bias. Therefore, an internal auditor can’t have any responsibility regarding operational management to achieve this objective insight. In other words, they must be independent.

  • Improves Efficiency of Operation

By objectively evaluating the operation’s policies and procedures, an organization can receive assurance that they are doing what they supposed to do based on the operation’s policies and procedures. With a continuous evaluation, an organization can identify control recommendations to improve the efficiency and effectiveness of the performance.

  • Evaluates Risks and Protects Assets

An internal audit program assists stakeholders by identifying and assessing risk within an operation through a systematic risk assessment. This system will help an organization to ensure the mitigation of any found risks and allow for a remediation plan to take place.

  • Assesses Controls

Internal auditing is beneficial because it enhances the control environment of an organization by continuously evaluating operation efficiency and effectiveness.

  • Ensures Compliance with Laws and Regulations

Compliance with laws and regulations will not become a big issue when an internal audit is regularly performed. This can be achieved because an internal auditor must always ensure that any operating procedures comply with local laws and regulations. Thus, an organization can avoid costly fines and prepared for an external audit.

Performing internal audit is not only important to reduce potential risk in an operation but also enhancing the process to achieve efficiency. That are the reasons why internal audit is pivotal to an operation.



IIA. (n.d.). What is internal audit? Retrieved June 29, 2020, from https://www.iia.org.uk/about-us/what-is-internal-audit/

Morris, S. (2017, May 11). 5 Reasons Why an Internal Audit is Important. KirkpatrickPrice. https://kirkpatrickprice.com/blog/5-reasons-why-internal-audit-is-important/

Wiley. (n.d.). What Does An Internal Auditor Do? Retrieved June 29, 2020, from https://www.efficientlearning.com/cia/resources/what-does-an-internal-auditor-do/