INTERNAL AUDIT SEC 138

“Clause 138. – This is a new clause and seeks to provide that prescribed ComPANies shall be required to conduct an internal audit of functions and activities of the Company by an internal auditor appointed by the Company. Manner of conducting the internal audit shall be prescribed by the Central Government.” 

Introduction

Internal Auditing gives the fundamental purpose, scope and nature of the organisation or the firm. It is an independent consulting activity which tells us the worth of an organisation and is designed to add worth to the organisation. Internal audit provides an objective assurance and helps in the betterment of the organization’s operations. 

The internal auditing in an organisation helps in accomplishing the objectives by the copyright of  ICSI. This means that any material or content could now only be brought to a systematic and disciplined approach for the evaluation and improvement in the effectiveness of the control, risk management and governance pROCesses under the ICSI.

What all does the internal audit looks after:

The internal audit contributes to the following areas of an organisation: 

1. The Internal audit provides you with the independent review and appraisal of control systems across the organization. The audit is responsible for both the financial control systems as well as operational areas by which the organisation may benefit from the auditings.
2. It looks after the extent of compliance of policies, regulations, pROCedures and legislation and also checks the compliance management systems of an organization.
3. The Internal audit facilitates good practices in the field of risk management. The audit requires systems for ascertaining, measuring, managing and mitigation or dispersion of the risk (wherever possible).
4. The audit also helps an organisation to identify the waste and find the inefficiency and duplication of effort of the organization. Thus it helps in benefitting the savings of the Organisation.
5. The Internal auditings help us to structure activities and programs which would safeguard the Company assets. Also, there are many internal check systems which reduce fraudulent activities and provide us with early warnings if any fraud is detected.