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Mitigate Risk with an Internal Audit
Companies looking for ways to reduce costs or who do not want to employ full-time internal auditors can outsource the internal audit function to attain the benefits, but not the cost. Many companies list areas they consider to be of high business risk - “auditable areas.” They are able to mitigate some of this business risk by having an independent review of those areas through an internal audit.
Internal audits can help you determine whether there are appropriate and functioning internal controls over your administrative and accounting processes and systems. These reviews identify ways to improve the efficiency and effectiveness of your policies and procedures, provide a plan structure for improvements to these policies and procedures, and can evaluate auditable areas for potential fraud while providing best practice suggestions. The end result can be cost savings and a decrease in business risk.
An internal audit can also highlight the need for internal controls. Controls are simply good business practices. Controls can provide reasonable assurance that management data is reliable; assets are accounted for and safeguarded from loss; operating practices are sound and help ensure compliance with policies, laws and regulations; and resources are used efficiently.
Outsourcing internal audit services can provide assurance to external parties and compliance with applicable laws and regulations while eliminating costs and allowing management to focus on more strategic matters and core competencies. These services could include creating an annual internal audit schedule from a business risk assessment program; coordinating and assisting the external auditors; creating and performing individual internal audits; writing audit reports and reporting to upper management whether it be an owner, a Chief Financial Officer, Board of Directors or Audit Committee. An outsourcing arrangement can be structured to operate within an annual fixed cost budget.
When you need to mitigate business risk by creating and testing internal controls, contact Decosimo's internal audit team and ask us how we can help. Our professionals can conduct independent and objective reviews of your company's operations and procedures. We will assist you in the effective discharge of your responsibilities by furnishing you with analysis, appraisals, recommendations and pertinent comments concerning the activities audited. Our internal audit group can provide a variety of internal audit services, such as short-term engagements on specific projects, a complete outsourcing of the internal audit function or consultations and co-sourcing arrangements with existing internal audit departments.
Decosimo’s internal audit team has provided internal audit advisory services to existing internal audit departments of financial institutions, utility and manufacturing companies. Our internal audit team consists of Certified Public Accountants and Certified Fraud Examiners. Our internal audit services management team has over 30 years of experience creating and managing internal audit departments for public and private clients in industries including, manufacturing, retail, energy, healthcare, and the restaurant and entertainment fields.
Cash Receipts and Cash Management - Companies lacking good cash receipts systems, policies and procedures cost themselves thousands if not tens of thousands of dollars.
Cash Disbursements - The cash disbursement process in any company usually has the highest risk due to the amount of company funds involved. All transactions for goods and services must be authorized and documented before payment is made. The accounts payable process must have controls over methods of payment (check, wire, credit) that include matching authorized purchases to receipt of goods or services and to the vendor’s invoice. Shipping and delivery, storage costs, discounts, tax exempt purchases, timeliness of payment and a myriad of other issues can be addressed to save money if inefficiencies are discovered and corrected. Ascertaining that the cash disbursements process has a good internal control environment further safeguards the company’s assets and lessens business risk of fraud, misappropriations and misuse of funds.
Purchasing & Procurement - Purchasing and procurement is an area with higher risks for kickbacks, poorly negotiated deals, contract noncompliance, other contract issues and employee misuse of funds. Without proper guidelines for employees to follow, such as those found in a Purchasing and Procurement Policy, a company runs the risk of employees becoming creative, resulting in financial losses.
Inventory - The importance of inventory to an entity will depend on the type, quantity and value. Manufacturing and retail companies rely heavily on internal controls over inventory to manage and sell their products. Many of these entities have loss prevention teams as well as internal audit department, but they outsource the control review process to an independent accounting firm such as Decosimo because inventory control is so important to their survival.
Information Technology - Information Technology (IT) audits address the internal control environment of automated information systems and how these systems are used. IT audits typically evaluate system input, output and processing controls, backup and recovery plans, and system security. As companies continue to automate tasks, the increase in automation leads to increased risks and the need for proper checks and balances. Companies are required to protect data from nonauthorized individuals, whether they are employees or outside hackers. Much of the risk can be understood and mitigated by performing vulnerability assessments, penetration testing and security reviews on computer systems. Depending on your company and industry, you may have basic IT control issues or unique ones. We customize to your needs.
Human Resources - Human Resources covers a wide variety of workforce activities, including employment law issues, compensation and benefit plan design, employee hiring and termination procedures and the handling or administrating of many corporate policies. Some of the new issues involving HR are management ethics, increasing healthcare costs, knowledge retention as baby boomers retire, and succession planning. Audits of the entire HR area or just elements within HR can save a company embarrassment, bad public relations, fines and penalties.
Decosimo is an independent member firm of Moore Stephens North America, which is itself a regional member of Moore Stephens International Limited (MSIL). All the firms in MSIL are independent entities, owned and managed in each location. Their membership in, or association with, Moore Stephens International Limited should not be construed as constituting or implying any partnership between them.