Internal Audit: The Main Tool For Monitoring The Effectiveness Of Compliance Control

Almost any incident in an organization means that internal control in a particular area is not formed or does not function properly. Accordingly, not only the one who committed the violation is to blame, but also the one who did not take all measures to prevent this from happening. This may indicate the absence or insufficient effectiveness of the preventive mechanism, which should counteract the formation of unfavourable situations.

Effective corporate governance relies on internal control procedures and communication with senior management (board of directors and senior management) regarding the effectiveness of such controls.

An effective internal control system provides the necessary degree of confidence that the company will be able to promptly respond to adverse events in the external environment and stimulate internal resources to achieve the goals of each business process.

Senior management is responsible for organizing and maintaining an effective internal control system, as well as for monitoring its functioning.

Board of Directors - determines the general directions of the organization, analyses its overall effectiveness and compliance with the nature, scale, and conditions of activity, and considers the results of assessing its effectiveness, identified significant deficiencies and recommendations for their elimination.

The role of audit companies in India is to monitor and evaluate (independent and objective) the work of the managers of the organizations, as well as develop recommendations to improve its reliability and efficiency. Thus, internal audit exists to support senior management in the effective and efficient performance of their oversight responsibilities, and this support is one of the times when the internal audit is beneficial.

The risks associated with non-compliance with any requirements affect the entire activity of the company.

Senior management can increase the value of the company and improve its image with stakeholders by using the internal audit to manage compliance risks and strengthen compliance control, which requires:

Internal auditors can add value to compliance auditing by professionally performing relevant audits. Performing an appropriate company audit means first examining why compliance is required. Typically, this is for legal, regulatory, operational, or ethical reasons.

So, after knowing all this don’t you find audit consulting services the best solution to avoid uncertain events in your company? We suggest you consult the best audit firms in India, the expert team of which will help you in finding all the errors and faults in your business's internal processes.

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by:

CA Aman Aggarwal

AKGVG & Associates

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