The best health care includes preventative solutions – services that are intended to keep people from needing care for conditions that can largely be avoided with proper attention and healthful practices. The healthiest people take basic, simple steps to become and remain healthy. They are aware of their health and regularly do things to monitor and maintain that health. They don’t wait to see a doctor until they need to go to the ER; rather, they get regular checkups to evaluate their health and identify potentially serious conditions early in their development.
They understand: An ounce of prevention is worth a pound of cure.
This proactive approach is just as true for companies. Internal audits are not a luxury reserved for large companies alone; they are an element of basic financial health insurance – a way to have regular checkups and spot serious issues before they become critical, catastrophic, or cancerous.
Regular internal audits, like regular doctor visits, keep your business healthy.
Early Error Detection and Correction
Just as early detection of a cancerous tumor exponentially increases the chances of long-term survival, detecting financial mistakes early reduces waste, increases profitability, and helps avoid major (or even crippling) financial illness. Even something minor can still be lethal to your business if left undiscovered. Early detection measures can help you discover a growing problem before it metastasizes into something that requires your immediate intervention.
Risk Assessment
Like a well-patient visit that gives professionals the opportunity to assess you for the risk of high blood pressure, high cholesterol, and diabetes, thereby giving you the opportunity to take steps to minimize the likelihood of these conditions actually occurring, regular internal auditing can also illuminate risk factors that could jeopardize future organizational health.
Fraud Reduction
Established internal auditing decreases the likelihood of serious fraud occurring – both ongoing occurrences from within your company and those isolated instances that may occur from outside your company. The realization that strong auditing regularly occurs discourages those snake oil salesmen who would attempt repeated, systematic fraud. It also provides documentation in case attempts are made, successful or not, that can used to prosecute those who engage in fraudulent practices.
Process and Procedure Improvement
Similar to risk assessment, internal audits are an excellent way to analyze the quality and effectiveness of processes and procedures. This is akin to examining your daily activities and recognizing actions that are hazardous to your health. And housing that responsibility apart from the offices and departments that create the processes and procedures is important. It removes the effects of bias and blind spots, since people who work too closely to something are less likely to be able to see flaws and negative issues.
Impartiality
We all tend to Google symptoms on occasion to diagnose ourselves with a life-threatening illness – but we all know that visiting the doctor is much more effective in obtaining the proper diagnosis, establishing healthful practices, identifying possible health risks, and treating illnesses and diseases early enough to ensure continued life and health. Likewise, having fresh eyes behind the auditing process allows the observations and conclusions to be as impartial as possible – and those professional eyes are more likely to identify potential pitfalls and suggest proper treatment at an early stage. Such impartiality is also vital to the many shareholders who expect unbiased, accurate, comprehensive financial information and analysis. It is particularly critical when formal, regulatory audits occur, as many auditors will be less suspicious and swifter in their own examinations if they know the internal audits have been performed by a respected auditing agent.
Summary
Your company cannot afford to ignore basic elements of financial health and security any more than you can afford to do so with your own physical health. Solid insurance policies and regular checkups are a central part of any health plan, whether it is your own or that of your company. Internal audits are the equivalent of a health checkup – an absolute necessity component of well-being, including peace of mind.
Becoming a Better Auditor
We believe that auditors can be strong partners to the organizations they serve. That’s why Fowler & Company has launched the Internal Audit Career Academy, where internal auditors learn the competencies that will allow you to be clear about the direction in which you are going:
- You will receive growth strategies and best practices you didn’t even know existed
- You will be mentored by successful auditors
- You will have the opportunity to model examples that will show you exactly how to do something
- You will learn from other people’s best practices and experiences
- You will work from proven templates and processes
In addition, you will have the opportunity to set goals and gain clarity with other auditors twice a year at a live event filled with meetings and networking opportunities. Learn more.
