DRM Internal Audit
An internal audit helps a company in bringing a systematic, well-organized approach to evaluate and improve the business process by mitigating risk, improving management practices and enhancing the company’s governance. With integrity and accountability used as the core values, an internal audit provides great value to the company by analyzing key data and business processes and giving recommendations accordingly. Hiring a subject matter expert from DRM to supplement your internal audit staff can greatly enhance the internal audit team of any company.
How does an Internal Audit work?
Each company has a different organizational structure and goals. Therefore, subject matter experts take a unique approach in conducting and/or assisting an internal audit. However, there are some industry standards and practices which are common to most internal audits. A general outline of this process is listed below:
- Evaluate the existing policies of a company’s internal audit policy and establish the authority of internal audit by reviewing it in the light of International Standards for the Professional Practice of Internal Auditing.
- Interview senior management of the company to build an understanding and give them a clear picture of the internal audit function, its requirements and expectations from different departments.
- Identify the major risks to the company using the information obtained from interviewing department heads and senior management. Develop a system to record all this information to make it easy to access for future reference.
- Review the audit committee charter and tailor it to the company’s structure and goals.
- Evaluate the company’s bench-marking needs by considering who the leaders and stragglers are in the forest industry. Make this a part of the interviewing process mentioned above.
- Review the company’s policies and procedures especially in regards to the management’s responsibility to control the organization.
- Discuss open and closed internal issues with external auditors that have previously worked with the company.
- Start compiling a list of all audit-able entities that are part of the company.
- Map the major processes of the company by meeting with operation managers in all departments to better understand their risks and concerns.
- Develop a macro-level risk assessment which should include both internal and external risk factors.
- If necessary, develop a charter for internal audit making sure that senior management and audit committee are on board and approve the charter.
- Stipulate a budget for the internal audit including personnel and travel expenses.
- Develop an audit plan with a clear timeline based on the risks identified and the resources made available. Leave some room for management requests.
- Hire staff based on the expertise needed to tackle the risk assessment and develop a training plan.
- Keep the senior management in a close loop and let them ensure that other departments are aware of the audit activity and are ready for complete cooperation.
- Establish a quality assurance program by working with the management to implement best-practice reporting relationships. Following up on audit recommendation and measuring performance are key to a successful internal audit.
How Can an Internal Audit Help
Dendro Resource Management Inc. is well-versed in reviewing existing internal audit frameworks and establishing internal audit departments from scratch. Our experts understand the needs of a fiber supply chain and using their years of experience working within the industry, they can design and maintain an effective internal business control structure for your company.
Get in touch with us today and one of our internal audit experts will be there to assist you!