Pros and Cons of internal audits

Internal auditing is a consulting activity involved in advising organizations on how to improve and achieve their objectives.It is a systematic methodology for analyzing business processes and recommending helpful solutions.Professional internal auditors are employed by companies or organizations to perform these various activities; some of the auditing may involve internal control topics such as the reliability of financial reporting, investigating fraud, or compliance with laws and regulations.

Pros to internal audits
There are several advantages to having internal audits.Here are some of those advantages:

• When an internal audit is performed you can be sure that a proper accounting system is going to be introduced into your company.If you have never worked in an accounting office or seen what goes on in there then you will not appreciate the fact that if things are set up wrong, everything can go wrong.There is a huge need within companies to have an orderly arrangement of personnel, procedures, forms, etc. in order to achieve a positive outcome.With in internal audit businesses are better able to handle business concern.An auditor can tell you where your weaknesses are and what you can do to improve them.


• Management can review progress through internal audits.In fact management should rely heavily on internal audits for best results.Internal audits are helpful to have control over all business activities, which is a management function.Through an internal audit a manager can remove difficulties and look forward to much smoother working.


• Internal audits can eliminated or at least reduce the chances of fraud happening within your company.Internal auditors are often times appointed by the company to keep a watchful eye on staff members such as clerks and certain accounts so that fraud does not happen.Accounts are audited on a continual basis and that's why there is less chance of fraud happening.


• An internal audit can also help cut down on the external auditing for the company.


• Internal auditors can be appointed any time by any company; they can make things a lot easier for the whole company.

Cons to internal audits
There are always two sides to every coin right, and with internal audits there are also some disadvantages:

• Internal auditing can sometimes fail to check planned frauds.Management can play many tricks in order to manipulate accounts to conceal inefficiencies.These types of frauds are not disclosed and the audited accounts will not always show a true and fair view.If the information from management is false then there is room for fraud and therefore internal audits can sometimes yield undesirable results.


• Auditing can fail to disclose the correct information of what's happening.Background entries may not be totally clear to audit staff and management may be vague on their clarifications.Whether or not these things happen, an auditor still has to give his report.


• Another disadvantage to audits is that they don't always show the true picture.An auditor's purpose fails when they don't see the real business affairs; the view of the audit is altered.

You can see that there certainly different things to consider when deciding whether or not to get an internal audit for your business.Considering the pros and const of internal audits will give you a good start on your decision.