26 Jun 2023 Common Risks and Opportunities Audit Committees Should Consider
Authored by RSM US LLP, June 26, 2023
With the right investment, an internal audit can do much more than just prepare your organization for an external audit, acquisition or public offering. An intentional approach can yield strategic benefits by providing useful insights, identifying competitive advantages and protecting your company’s assets.
But investing resources in internal audit can be a tough sell to your board’s audit committee. They need to know exactly how this investment will pay off in terms of reducing risk and increasing opportunities.
These key risks and opportunities can help your audit committee see the power and potential of internal audit.
Risk: Internal controls
One of the most common use cases for internal audit is ensuring that internal controls are working effectively. This gives you a baseline idea of your company’s financial health before you begin an external audit. It will also help you identify areas of improvement that could reduce compliance risk.
Opportunity: Increased efficiency
Internal audits can help you evaluate the overall effectiveness of systems and processes to identify opportunities for improvement. With regular internal audits, you can tweak processes and make adjustments to maximize profitability. This type of oversight can be particularly useful given today’s talent shortage, where a lack of expertise and experience with certain functions can lead to errors and inefficiencies.
Risk: Fraud
Internal audits can monitor employees for suspicious or risky behavior, which helps you identify and prevent potential missteps or fraud before they happen. Performing penetration testing and looking for proper credentialing and system access are also important.
Opportunity: Competitive advantage
Understanding how your company stacks up against competitors and industry benchmarks can support strategic and tactical decision-making. Internal audits can ensure that your business stays ahead of the curve with information about emerging trends and threats. You can use the knowledge gained to avoid unexpected risk and capture new opportunities.
Risk: Strategic threats
Internal audit is a critical support system for your enterprise risk management program. Audits can offer visibility into whether you’ve identified and managed risks relating to strategic goals, helping you to stay on track. Regular auditing may also reveal new or emerging risks that were previously unidentified.
Opportunity: Objective insight
The internal audit function should serve as your organization’s trusted advisor. Internal auditors are in a great position to connect the dots within the bigger picture, as well as notice warning signs and gaps that others may have missed. With the right level of independence and objectivity, internal audit can serve as a clear-eyed catalyst for positive change.
Taking the next step with internal audit
Properly developed, an internal audit function offers multiple benefits to the organization beyond simple compliance, reducing strategic threats and creating opportunities by increasing efficiency and competitive advantage.
With innovations like robotic process automation and access to our highly trained team, your organization can experience better workflow, leverage deep and diverse skills and increase risk management effectiveness.
DO YOU HAVE QUESTIONS OR WANT TO TALK?
Fill out the form below and we’ll contact you to discuss your specific situation.
This article was written by RSM US LLP and originally appeared on 2023-06-26.
2022 RSM US LLP. All rights reserved.
https://rsmus.com/insights/services/risk-fraud-cybersecurity/common-risks-and-opportunities-audit-committees-should-consider.html
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Haynie & Company is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.