Saturday, February 23, 2013

Tips for Internal Auditing

Many employers are afraid to conduct an internal audit. Well, one- many don't want to find anything bad. But two, many are not aware how to conduct an internal audit. Here are my tips!

First, review an organizational chart of the department or division on which you will be conducting the internal audit. Knowing who reports to whom in the department gives you a big-picture view of responsibility and knowledge. As an employer, you should have this key information on hand. But, sometimes (especially with larger companies) this is necessary.

Next, set up a meeting with everyone and be prepared to ask the right questions. Remember, it isn't always about what questions are asked but how questions are asked. Don't be accusatory but be aware.

Last, look at all the steps you have set-up. Are they being followed? If not, why not? The devil is in the details. If a lot of steps are constantly being missed then there is likely to be a bigger issue and a second look is probably needed. Remember; always check into the company's internal controls policies to gauge the level of protection they provide from theft and fraud. Internal control policies include things like separation of accounting duties between different employees, locked safes for holding pending bank deposits and password-protected accounting software that tracks exactly who does what and when. This should be the first area of concern for an internal audit!

Have you had to conduct an audit recently? I'm interested in your story. Let's talk!

Twyla

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