One of the most important things to have in a business is internal audit. You can't expect to have a business in good running condition without this process of analyzing the company's overall organizational standing and the generating of possible solutions that may come out of imminent problems of the company. Financial reporting is an indispensable asset in an organization. With it, you will be able to determine if the company is being productive, able to meet its short-term and long-term goals and open for progress. It will also help you know if there are recurrent problems that need to be addressed, and if so, what particular solutions will help the organization or company to solve them.
A good thing about the internal audit is that it is governed by the 2002 Sarbanes Oxley Act, which is used as a standard for all organizations when it comes to the procedure of the internal audit. Also known as SOX, the law sets the criteria for lawful internal audit that all companies must abide to. It very specifically outlines how audit report, internal control, tax audit and objectivity of the internal auditor are to be ensured. Though it may not exactly tell you what other minor details to expect when it comes to internal audit jobs, training, charter, checklist, report, etc., it provides the guidelines needed to avoid the previously infamous accounting scandals that had people heavily discouraged.
Internal audit is special in the sense that it helps you know what needs to be done internally to make the company function more effectively. It deals with all the company's resources, how these resources were used, and if there is a need for more or less resources in the future. Since this is an internal audit, it is very vital that the internal auditor is of good conduct and is very much separated from the company's interests. An outsider is often asked to do this job to ensure this objectivity criteria that will not compromise the quality of the internal audit.
For a more effective internal audit, it pays to have well-organized records of all company transactions, sorted by date and time if at all possible. This will help the internal auditor to immediately identify trends, patterns or regular occurrences that may serve as the company's strength or weakness. There are basic standards from SOX, but in a nutshell, they are all formulated in such a way that you don't get misled.
A lot of people foster the misconception that internal audit is scary, especially given the heavily scrutinized tax audit procedure that may cost companies a lot if things don't add up accordingly. Tax audit involves checking the company's tax contributions and see if they all tally in accordance with your organization's income. But if you are paying your taxes well and managing your resources effectively in and out of tax audit season, there is really no reason to be afraid. It will also be helpful to you if you know the SOX to aid you should you have any issues with the internal audit being done in your company.