Boost Your Bottom Line by Understanding Your Internal Audit

For many, the word "audit" conjures up images of tax auditors camping out in dark offices or reading intimidating letters from the IRS. However, an internal audit can become an invaluable tool that business owners and executives come to love.

Typically, internal audit covers the broad areas of governance, risk, controls, and compliance. In recent years, some of these areas have been expanded to include risks related to cybersecurity. The resulting data, strictly for internal use in evaluating a business's strengths and weaknesses, can help validate whether a company:

• operates as designed,
• manages its risks effectively,
• complies with applicable regulations and laws, and
• has a mechanism in place to prevent and sustain a cyberattack.

Companies today do business in a complex and fast-changing world. The rapid pace of technology improvements brings significant technology-related risks — such as security, business continuity, and data integrity — that internal audit can bring to light. Likewise, your financial statements are only as accurate as the accounting data that goes into them. An audit of your accounting function can help ensure the timely, accurate reports you need to make informed business decisions.

However, having sufficient staff and expertise to conduct a meaningful, regularly scheduled internal audit can be challenging for smaller companies. Increasingly, family and closely held businesses are choosing to outsource—or "co-source"—internal audit functions to a CPA or consulting firm. These knowledgeable professionals join the internal audit team to help protect the company and reduce risks.

Benefits of Finding the Right Internal Audit Firm Match

Finding the right internal audit firm can bring some significant benefits, including:

• Access to advanced analytics. An outsourced audit partner may be able to perform more sophisticated risk analysis and provide advanced data analytics supported by actionable insights.
• Leveraged skills. Accounting firms, for example, have a larger talent pool and can leverage skills from across the organization. They also typically have robust methodologies and audit tools from which your organization can benefit.
• Flexibility. If an area requires immediate attention, the outsourced firm can increase its resources on demand to assist the client in mitigating risks or threats.
• Independence. An outsourced audit team offers the highest assurance and objectivity, factors that audit committees and boards of directors value.
• Cost savings. Outsourcing transforms the internal audit from a fixed cost to a variable one. As the outsourced team does not consist of full-time employees, the client avoids expenses such as benefits, salaries, and other typical employee costs.
• Knowledge transfer. Your in-house audit team members benefit from the knowledge transfer that occurs when working with outside professionals, enhancing their competencies.

Better Together

In the end, effective internal auditing can bring a systematic, disciplined approach to managing your business, allowing you to see how it operates and how you can improve it. Our cross-functional team of trained internal audit advisors includes CPAs and forensic accountants who can collaboratively strengthen your business while mitigating risk. Contact your Brinker Simpson advisor today to learn more about how our internal audit services and our in-depth industry expertise can help you boost your bottom line.