In the face of increasing complexities in the global business environment, internal audit has evolved beyond its traditional role of detecting errors. It has become a strategic partner that adds real value to organizations. Internal audit acts as a safety valve that ensures operational efficiency, the credibility of financial reports, and compliance with laws and regulations, relying on auditing offices like Al-Hamli & Partners Certified Public Accountants and Auditors to enhance an organization’s ability to achieve its strategic goals.
What is the Concept of Internal Audit?
According to the Institute of Internal Auditors (IIA), internal audit is an independent and objective activity that provides assurance and consulting services aimed at adding value to the organization and improving its operations. It helps the organization achieve its goals through a systematic approach to assessing and improving the effectiveness of risk management, control, and governance processes.
This definition highlights two key components of modern auditing: independence (functional reporting to the audit committee) and objectivity (impartiality in expressing professional judgment).
Key Goals and Importance of Internal Audit for Your Company
The objectives of internal audit cover all aspects of organizational operations, and these can be provided through the best auditing offices in Saudi Arabia. The most prominent objectives are summarized as follows:
- Ensuring adequate controls are in place to protect company assets from loss or fraud.
- Verifying the accuracy and reliability of accounting records and financial and administrative reports.
- Ensuring all departments comply with internal policies and external laws and regulations.
- Evaluating how well resources are being utilized to reduce waste and increase productivity.
- Identifying risks that may hinder goal achievement and providing recommendations for handling them. For more information about our services, feel free to contact us at 0539300404.
International Standards for Internal Auditing (2024)
The year 2024 marked a significant shift with the release of new global standards for internal auditing by the Institute of Internal Auditors (IIA), aiming to simplify the professional framework and enhance performance quality. These standards focus on five main areas:
- Purpose of Internal Auditing: Clarifying the value that the activity provides to the organization.
- Ethics and Professionalism: Emphasizing integrity, competence, and professional care.
- Governance: Organizing the relationship between the Chief Audit Executive and the Board of Directors.
- Audit Activity Management: Strategic planning and ensuring adequate resources.
- Task Implementation: A structured methodology for planning, reporting, and follow-up, often through auditing offices like Al-Hamli & Partners Certified Public Accountants and Auditors.
The Difference Between Internal and External Auditing
There is often confusion between internal and external auditing, but there are substantial differences:
- Internal Auditing Service is performed by employees within the organization or outsourced through auditing offices or Certified Public Accountants and Auditors, reporting to senior management and the audit committee. Its goal is to improve internal performance and manage risks.
- External Auditing Service is carried out by Independent auditing offices from the best certified accounting firms in Saudi Arabia , which submit reports to shareholders. Its primary goal is to provide a professional opinion on the fairness of financial statements and financial analysis. For more information about our services, feel free to contact us at 0539300404.
Also Read:
- Why Do Major Companies Rely on Accounting Firms in Riyadh?
- The Most Important Internal Auditing Tasks and Their Role in Strengthening Financial Control
- How Does Preparing Financial Statements Affect Your Company’s Opportunities for Funding?
- Zakat and Value Added Tax Regulations in Cases of Liquidation, Bankruptcy, or Tax Refund in Saudi Arabia
- The Target Local Content Ratio and Gradual Plan, and the Periodic Report between Nature and Target
- The role of the Comprehensive Income Statement in determining corporate profitability and growth strategies
- Accounting Standards and their impact on your financial reports and credibility
Future Challenges and Trends in Internal Audit
Internal Auditing Service today faces major technological challenges, leading it to adopt technology-driven auditing practices, such as using AI for big data analysis, continuous auditing, and cybersecurity. The ability of internal auditors to adapt to these shifts will determine how effective the function remains in the future.
In conclusion, internal audit is the third pillar in the Three Lines of Defense Model, serving as the optimal investment for any organization aiming for sustainable growth and organizational excellence in an environment full of changes. Organizations that rely on auditing offices like Al-Hamli & Partners Certified Public Accountants and Auditors have a strategic advantage in ensuring their compliance with local and international laws.
