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Introduction

During these trying times for public sector finances, internal audit and also the audit committee come with a natural part to experience in ensuring continuing management effectiveness. Despite budget cuts and reduced staff numbers, management needs to ensure that controls continue being effective, risks are managed and standards of corporate governance remain high. Internal audit must react to these challenges by maintaining a strong, independent and objective stance and ensuring audit work concentrates on what’s most significant within the organization.

Strategic alignment

Internal audit must concentrate on those ideas that bring about the achievement from the organization’s strategic objectives. Internal audit must have its very own strategic plan that’s aligned using the organization’s strategy, while being flexible enough to consider account of changing priorities and circumstances. The strategic audit plan should try to cover all key strategic risks.

Concentrate on risk

Every public sector organization should conduct regular risk assessments to make sure that risks towards the achievement of their strategic objectives are identified and managed. Internal audit plans and work programmes will need to take these risks into consideration and become able to answering emerging risks. Additionally, it is important to audit the organization’s risk management process to make sure that it is constantly on the identify alterations in the danger profile from the organization. An audit from the risk management process will even make certain that those areas of the organization possess a common knowledge of risk.

Promote continuous improvement

There are two aspects towards the promotion of continuous improvement, the very first with regards to the interior audit function itself and also the second with regards to the organization. Internal audit should continuously improve its very own capabilities through ongoing overview of its performance, providing training to staff, and conducting quality assessments and peer reviews. Periodically, a completely independent external quality assessment ought to be conducted to achieve a goal look at how internal audit has been doing against internal audit standards. The performance and role from the audit committee ought to be contained in these reviews, the outcomes which ought to be used as benchmarks for more improvement objectives.

As audits are performed with time, internal audit should observe trends that emerge within the organization and not view each audit in isolation. Trends might indicate too little the performance from the organization that management must address. For instance, if your quantity of audit investigations indicate weaknesses in, say, procurement, management may be advised to look at procurement in an organizational level and connect the procedure, not only the particular weaknesses identified within an individual audit. In this manner, the audit function can bring about efficiency improvement and increase the value of the organization.

Manage relationships effectively

The influence of internal audit as well as the audit committee is crucial towards the success from the function. The connection between your Audit Chair and also the Head of Internal Audit ought to be strong so the audit function has got the independent support necessary to succeed. The Audit Chair should satisfy the Leader regularly, perhaps after every audit committee meeting. The committee ought to be kept informed of key developments within the organization in order that it may take these into consideration, where relevant, in reaching its decisions. Good relationships will also be essential with line management to ensure that audit findings and recommendations are accepted and applied. Customer happiness surveys are helpful tools to make use of after an audit to make sure that the customer comes with a chance to give feedback around the audit process and cope with any difficulties that could have arisen.

Affordability

Every public sector organization should make an effort to attain the cheapest in undertaking its functions. The strategies by which this is often achieved are actually extensively recorded. Internal audit should think about where opportunities arise to conduct affordability audits and really should include these in the annual audit plan. The outcomes of worth for the money audits, particularly, will help inform management if the organization is achieving its strategic objectives and whether actions have to mitigate risks.

Conclusion

A highly effective internal audit function will help promote a mindset within the organization that concentrates on risk, controls and also the achievement of worth for the money. This, consequently, might help the organization to enhance its performance and management effectiveness and boost the probability of achieving its strategic objectives.

Source: http://www.articlesbase.com/finance-articles/internal-audit-and-public-sector-administration-performance-5595051.html

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