How To Decide Frequency of Internal Audits in your Organisation?
In the corporate world, it takes a huge effort from the management to run the business at full capacity to meet the customer demand. Yet, most business owners perform a balancing act to enhance the efficiency of operations while cutting costs and ensuring the internal controls are strong and free of fraud. However, the management May lose focus while running the business and this is where internal auditing done by the best audit firms in Dubai come in handy for the companies.
You can’t undermine the role of sales reports and cost analysis documents that provide you with a clear understanding of how the company is meeting business objectives including growth and cost savings. However, there are many other areas that require an assessment to determine the strengths, weaknesses and vulnerabilities of your business operations. Performing an internal audit in your organisation can provide you with adequate reporting to document the current operational health of your company p and focus on issues that need immediate attention.
A pertinent question remains: how often you should conduct this assessment? This blog is an attempt in trying to answer this highly critical question. Read on.
Rules to Determine Frequency of Internal Auditing
The truth is there are no specific rules for determining the frequency of internal audits in any organisation. It goes like this: most often the type of assessment you want to be performed on your internal processes will in turn influence the frequency of the internal audits. The frequency of internal audits required for your HR process will be starkly different from that of finance. However, for better clarity, we can base it on the following factors.
The complexity of the Processes
Take stock of the processes in your organisation that require immediate auditing. Critical or high-risk areas should be audited more frequently. This could be done quarterly or twice a year. If the risk is low, conduct an internal audit just once a year or every other year. Tough to make a decision? Consult with the best audit firms in Dubai, UAE.
Maturity of the Processes
There will be some areas in your organisation that run like a well-oiled machine. However, this doesn’t mean you should ignore such processes. A viable solution is to audit such processes once a year or every other year. In contrast, processes that are newly created must be audited more frequently, for example, quarterly, until they become more stable.
Every company will have some problem areas that have a previous history of frequent deficiencies or non-conformities. Such areas of high concern should be audited more frequently: quarterly or twice a year. Processes that exhibit difficulty in yielding desired results and objectives should also be subjected to frequent audits.
Your Industry and Clients
Some companies require internal audits for quality assurance of products that will be shipped out to clients and customers. Such companies will have a set of control measures that need internal auditing of products and manufacturing procedures. In this case, internal audits can be done on a weekly or monthly basis.
For instance, some products to be sold in the UAE would need to undergo product registration standards set out by Dubai Municipality or ESMA (Emirates Authority for Standardisation & Metrology). If your company produces such products, an internal audit should be done on the products and production processes on a weekly or monthly basis to ensure compliance.
If you require to assess the management systems to determine whether processes and objectives are in line with the company policies and regulatory compliance, you may audit them quarterly or twice yearly. These types of internal audits are industry-specific and hiring audit firms in Dubai with relevant industry experience e will be fruitful.
Infrequent Internal Audits Lead to Increased Risk
If your organisation’s internal audits are infrequent, you may face operational, financial and security risks of your organization. It will also impact every customer or client that works with you. When the internal audit of your systems and controls become weak, it can in turn affect the management staff and the morale of your employees. The problems in your system and controls may build up to hurt the organization and you may have a tough time bringing past production processes up to full capacity again. Why take the risk when you can easily avail efficient internal audit services in Dubai.
Hire the Best Internal Audit Firms in Dubai, UAE
The frequency of internal audits in Dubai determines the success of your business and the morale of the staff. A common problem is that when no issues emerge after an internal audit, the companies reduce the number of internal audits. This may lead to reduced attention for areas of concern that will turn into a huge problem later on. A better way is to engage the best internal audit firms in Dubai such as Jitendra Chartered Accountants (JCA) to assess the strengths and weaknesses of your internal controls and systems.
JCA is powered by highly qualified Chartered Accountants who can provide efficient reports on your processes that require immediate attention. We can advise you on the frequency of internal audits as well as recommendations to improve the internal controls. Consult with JCA today to ensure the processes in your organisation is robust.