Increasingly, we see a transformation of Internal Audit in the market, which assumes a variable role in different business segments, depending on the context of maturity and complexity of the associated corporate governance environment.
The dynamics of today's global business climate are leading organizations to seek new ways to improve their competitive advantage. In this context, qualified companies offer internal auditing services and have teams of consultants that help organizations achieve their objectives, with an economic, strategic and disciplined approach to the risk management process, which gives even more emphasis to this transformation of internal auditing.
Internal Audit And Its Market Performance Internal auditing is an independent and objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization achieve its objectives through a systematic and disciplined approach to assess and improve the effectiveness of risk management, control, and governance processes. This definition is recognized and accepted worldwide and is published by the Institute of Internal Auditors (IIA), represented in Brazil by IIA Brazil.
The changes in the economic scenario are almost instantaneous and the challenge of the transformation of internal auditing is to keep up with them at the same speed. With the growth of the market it is difficult for the company to remain in the spotlight, a constant effort is needed not to be left behind. Hence the need to identify risks, optimize costs, seek strategic information and governance support, among other actions that are the focus of internal auditing work.
Every day, more managers confidently and reliably seek internal audit assessments and suggestions that they will be assisted in the strategy of identifying risks and improving the company's internal controls.
This transformation of internal auditing not only helps the company to gain efficiency in processes, such as
The main objective of internal auditing services is to add value and improve the operations of an entity through a systematic and disciplined approach that evaluates and improves the efficiency of risk management, control, and governance processes.
Internal auditing professionals need to understand not only the company's internal processes, but also the business area in which it operates. They must accompany the internal audit transformation, be highly qualified and have extensive experience in different business areas, developing strategic vision and easily identifying the risks to which the company is vulnerable.
Internal Audit — Best Practices Many professionals share the view that an effective internal auditing program can generate real profits for an organization. On the other hand, a weak internal auditing program can create chaos and different possibilities for physical and financial losses. Another reason for the transformation of internal auditing.
In this sense, better internal auditing practices can help organizations to keep their organizational obligations in compliance with their organizational obligations. It's possible and feasible for you to avoid problems and improve operational efficiency at the same time.
Some concepts on the subject, presented below, may assist you in conducting and reorienting internal auditing activities. For example, internal auditing professionals should or may be considered a valid and efficient option when:
External internal auditing specialists are not always necessary, however, a second look can contribute to a more complex process. Not every organization has the necessary expertise to conduct an adequate internal audit. External auditors bring an innovative approach and outside expertise that can be very valuable to daily internal auditing routines. External auditors provide an objective view and eliminate many biases that could be present if the team were comprised solely of internal auditing. An internal audit work cannot be considered reliable if the matter is not adequately mastered by the auditing team. To adjust normal internal auditing programs, programs must be built into the business process and not excluded, which is generally the case. Many internal auditing programs are focused on compliance and legislation but neglect risk. When organizations do not understand the importance of audits, they delay their execution or reduce the allocation of resources. It is necessary to allocate sufficient funds for audits, this initiative must come from the top management of an organization. Internal auditing programs should be reviewed periodically to assess whether they remain adequate in light of changing circumstances. For an internal audit transformation to take place and for an internal auditing team to be formed, certain skills must be required. While there are procedures that establish the minimum number of hours for a given company size, the number of auditors varies primarily with the type and complexity of an industry and the scope of the audit.
When building the team, internal auditing professionals must have knowledge of the company's processes and control methods specific to the audited risks, great communication skills, and humility. Review of job roles and appropriate segregation of duties must also be considered when an internal auditing team is formed. And as team size increases, skill sets can be isolated to individuals.
Application of the Swot Matrix in Internal Auditing There are many needs in the market for internal auditing, and as a result, as a rule, the strategic plan for this action must be periodically reviewed and adjusted. In this sense, an analysis of the internal audit SWOT matrix is satisfactorily recognized as an alternative to identifying the main internal and external factors that are important to achieve the defined strategy.
The SWOT analysis is suitable for diagnosing environments, internal or external to the organization, and which strategically provides techniques for identifying strengths and weaknesses in the internal environment, and opportunities and threats in the external environment.
In the transformation of internal auditing, since internal auditing is an independent activity that provides advice, examining the appropriateness, efficiency, and effectiveness of operations and performance of the organization's areas, objectives, and policies, depends on tools that seek information that is credible for the purpose of the audit.
The internal audit SWOT matrix consists of four elements, namely: 1) STRENGTHS, which are characterized by the organization's abilities, positive actions, and competencies. 2) WEAKNESSES, which are the negative characteristics, that is, points where the absence of capacity generates problems or lack of control. 3) THREATS, which correspond to external characteristics that are negative and cannot be controlled and 4) OPPORTUNITIES the external characteristics that positively influence
By constructing a SWOT matrix, internal auditing achieves a rich contribution to the quality of the work, since it is attentive to weaknesses and strengths and to the appropriateness between external and internal factors, developing a strategic and effective diagnosis. The SWOT thus becomes an integral part of strategic planning methods, which analyze the scenarios, compile the information collected through the four elements and generates a matrix in a structured way. In addition to being a strategic tool, it also enhances focus and directs results, providing credibility to information
Below, in detail, topics related to the four elements of the SWOT:
FORCES Defined vision, mission, values, and internal audit documents, as well as clear, concise, and objective roles, responsibilities, and reports; Policies, procedures, and manuals, including formal reporting standards and templates; Individual training plans and the possibility of personnel certification; Formal recommendation follow-up and established process for Constructive relationship with senior management, auditing team, and others Quality assurance and duly formalized continuous improvement program and Use of the Integrated Audit System, including the monitoring process WEAKNESSES Limited staff; Significant personnel changes; Institutional knowledge gap; Competency gaps due to limited human resources; Limited use of data analysis and data mining; Limited career opportunities for personnel within the organization and in the market in general; Limited participation as an observer in several Councils; Low support from senior management in the services provided and in the objectives intended in each job; Scarce time and insufficient financial resources; OPPORTUNITIES Improve the perception of the team's ability, knowledge, and capabilities; Educate stakeholders about the role and capabilities of auditing Get involved in new initiatives early to incorporate appropriate controls and Increased collaboration with other warranty functions, including management of Introduce risk and control the application of self-assessments at different levels; Improve knowledge and skills in data analysis, as well as Effective use of outsourcing and co-sourcing the function, identifying the best THREATS Slow organization to implement recommendations; Impediment of independence, or influence of undue areas or individuals; Ineffective communication with management; Reduction in management cooperation; Widening skill gaps; Staff turnover; Lack of awareness of the evolution of organizational strategies and of emerging risks, such as cybersecurity, technological risks, and others; Thus, for this transformation of internal auditing to take place, the market is increasingly looking for specialized professionals, with the necessary experience to be capable of these challenges and strategic initiatives.
TATICCA — ALLINIAL GLOBAL is already recognized by its clients and in the Brazilian market for providing services through professionals with the highest technical standards. The auditors act as consultants, offering suggestions and solutions to improve the management and control of organizations. We provide services designed to strengthen the reliability of information for use by shareholders, investors, creditors, regulators, citizens, directors, and other interested parties. We assist the
Get in touch with TACTIC — ALLINIAL GLOBAL , which operates throughout Brazil and globally, with integrated auditing, accounting, tax, corporate finance, technology services, Risk Advisory , business consulting and training. For more information, visit www.taticca.com.br or email taticca@taticca.com.br and learn more. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.
