Forward-looking internal audits promote good corporate governance
Under good corporate governance principles, the board and the audit committee are ultimately responsible for risk management and the effectiveness of the organisation's systems of internal control.
Commonly viewed as the executive arm of the Audit Committee, an effective and properly resourced internal audit function should actively promote good corporate governance practices, and play a significant part in the processes for the identification and optimisation of risk and thereby can contribute to the achievement of business objectives, and to the success and resilience of the organisation.
The internal audit function historically has encompassed certain capabilities or segments, including internal policy compliance, regulatory policy compliance, training and development, and process improvement. It has originally been developed as a way to assist organisations with safeguarding corporate assets and enforcing corporate policies, and has resulted in a function and a profession that have been viewed as stable, traditional, and beneficial but not necessarily essential for the organisation.
Effective risk management must now extend well beyond traditional financial and insurable hazards to encompass a wide variety of strategic, operational, reputation, regulatory, and information risks. New ways of assessing and managing business risk are causing internal audit leaders and their customers (top business executives and their boards and audit committees) to revisit the purpose, scope, and operations of the internal audit function. A new value-added internal audit model is now emerging and a comparison with the traditional internal audit model is provided below:
Traditional New Vision
