Through the establishment of a clear structure, recommendation of the internal audit team will be implemented and hence the company will realize improved performance.
To ensure that the internal auditing standards and other auditing standards are upheld, the company must come up with a way of continuously ensuring their internal audit staff attend conferences where training on standards are done. Implementation is only possible if the employees understand what is required of them and are acquainted with necessary materials on auditing standards. Auditing experts will then be engaged to evaluate the work of the internal audit staff to ascertain whether all standards have been conformed with. In areas where there has been failure of implementation, the staff responsible will be made accountable.
Implementation of the policies can also be done by ensuring that the management is charged with the mandate of facilitating the work of internal auditors in realizing their duties. Since the internal auditors are expected to offer their advice on the operation of a company, only the management is able to give full details of information that is essential in arriving at such recommendation Pickett, 2005.
The audit committee shall be made responsible for ensuring that the management fully cooperates with the internal auditors. The audit committee will be empowered to summon the senior managers and reprimand those who have failed to facilitate the make the internal audit function effective.
Finally, the staff of the internal audit department must be made to adhere to the rules and policies of the firms, as this is the only way in which the quality of their work will be sustained. The audit committee will be vested with the mandate of supervising the internal auditors and have the responsibility of punishing those employees who breach the code of objectivity and independence. Auditors who engage in collusion or who fail to do quality work will be subjected to company rules. In summary, implementation of responsibilities of internal auditors is indispensable in realizing effective findings.
Monitoring the implementation of selected polices
Implementation of the policies must be closely monitored to ensure that there are no deviations from the expected results. Continuous monitoring will ensure that factors that are likely to negate the outcome of internal audit work are detected in time and protect the company from pilferage of its resources. There are various ways in which the implementation is monitored to ensure the application of selected policies.
First, the management should ensure that they get timely and intermittent reports at particular times of their financial year. For instance, the auditors will be made to present their report to the management quarterly. Such action will make the application of the internal audit function active and enable realization of the desired outcomes. The quarterly reports must also be assessed to ensure that the quality of the findings remain high and add value to the company.
The second way of monitoring the implementation of the selected policies is using time lines and deadlines for internal audit functions. The policies on employment of qualifies staff in the internal audit department should be done within the duration set by the company. Additionally, policies that aim at reviewing the work of the internal audit department must be timely done. All functions that are aimed at improving the performance of the internal audit function must be time bound to ensure that much pilferage of resources are prevented.
Monitoring the implementation of the policies also require that there is segregation of responsibility so that no particular department has the responsibility of initiating and processing a transaction from the beginning to the end. The internal audit department should be charged with completely new responsibility from those of the other company departments Reding, 2007.
Besides, there should be a department that is charged with the mandate of evaluating what the internal audit department does.
In conclusion, the importance of the internal audit department in any company must not be undermined but should be strengthened. This department plays a critical role in ensuring that there is efficiency in the utilization of the company resources. Internal auditing role remains a key department in an organization that requires to be autonomous and to report to completely different directors who have no role in the day-to-day management of the company.
Corporate governance: the role of internal control. (2007). Hamilton, Ont: Society of Management Accountants of Canada.
Hightower, R. (2009). Internal controls policies and procedures. Hoboken, N.J: Wiley.
Pickett, K.H. (2005). The essential handbook of internal auditing (Condensed version of 2nd ed.). Chichester: John Wiley.
Reding, K.F. (2007). Internal auditing: assurance & consulting services. Altomonte Springs, Fla: Institute of Internal Auditors, Research Foundation.
Thomas, C., & Parish, T. (1999). Co-Sourcing: What’s in it…