Benefits of an Effective Internal Audit Program
Articles by: Richey May, May 28, 2020
Many business leaders view their internal audit program as a “necessary evil.” However, in addition to ensuring regulatory compliance, there are many benefits of having an effective internal audit function:
Assess your control environment.
An effective internal audit function enables a company to assess and evaluate their control environment and identify potential strategic, credit, operational, reputational and compliance risks. Management may then take necessary steps to either accept or mitigate these risks based on their risk tolerance.
Identify process and procedural gaps.
Through review and testing of operations, internal audit helps to identify areas that need further development of controls, procedures not being followed or being misinterpreted, as well as areas that may have outdated policies and procedures in place.
Increase efficiency and productivity of operations.
Since internal audit is independent of operations, we can often identify opportunities to enhance operational efficiencies, reduce costs, or improve ineffective procedures that are not operating as intended.
Sell loans to GSEs.
Without an effective internal audit function, organizations risk jeopardizing their approval status and their ability to sell loans to the agencies.
Mitigate compliance errors.
An effective internal audit program should identify compliance errors that are occurring and assist functional areas in developing further controls, policies, and/or procedures to prevent the recurrence of those errors. By taking a proactive approach, internal audit can help prevent future errors which could lead to costly penalties, reputational damage, and litigation.
Our Internal Audit team is focused on creating a customized and complete plan for your business to help you achieve the most value from your audit. Contact us today to learn more about the benefits of an effective internal audit program.