As a leader in an active enterprise, you know that performing an accurate and effective internal audit doesn’t happen by accident. For you, having a strategic audit plan to follow from the beginning of the endeavor ensures that your process accomplishes its goals and that your enterprise improves as a result.

Many of today’s corporations, however, exclusively rely on traditional internal auditing tools and practices to provide full assurance of corporate wellness. While those tools do work well for their defined purposes, they do not accomplish the full scope of forensic investigation that is available through the use of today’s advanced financial internal auditing software.

The scope of the audit plan

A comprehensive financial audit plan will define the scope, timing and direction of the work to be done. Depending on the characteristics of the business, the audit should initially address these elements of the company’s operations:

  • Its existing financial systems. Ultimately, a primary purpose of the review is to determine how the company creates, manages and records its financial transactions. This information is used to report to board members, determine tax liabilities and plan for future investments.
  • The extent of the corporate footprint. Many companies today operate at multiple sites, sometimes across borders. At the same time, they also work with partners, suppliers, contractors and other industry-related entities. Those interactions impact how the company functions and must be included in the audit to ensure a complete review is accomplished.
  • The core competencies of the business. How the company manages its proprietary products, information and practices is also a critical element for corporate success. Review of these processes within the context of the larger entity is essential to capturing an accurate representation of their importance to the company.
  • The standards that must be met. Many companies are subject to national and international standards. The inability to prove compliance or a failure to comply can result in fines or worse.

Audits should include risk assessment

Secondly, but no less significantly, a complete financial internal audit should also identify the risks that the company faces from any one of many threats, including the threat of internal fraud. Enterprises that rely on traditional financial auditing practices to detect these threats will not achieve the comprehensive review that they seek as most traditional financial auditing methods are designed only to provide reasonable assurance that the financial statements are clear of misstatements. They are not intended also to identify risks like employee fraud or embezzlement.

The person who performs the audit can also pose a risk. Internal auditors pose risks because sometimes they are the risk. And independent auditors can also be hoodwinked when they are compelled to rely on the declaration of the business regarding its financial position. For them, it is virtually impossible to find evidence of malfeasance in the company’s books and accounts using traditional auditing techniques.

State-of-the-art internal audit tools can now detect frauds

Today’s technological developments have added these forensic tools to enhance the depth and scope of the financial audit. Digital analysis of the entire enterprise, including partners, supply chains, and satellite offices, finds misstatements, errors, and omissions that might reveal malfeasance, embezzlement or other fraudulent activities. DFND Analytics, LLC offers these forensic tools to small, mid- and large businesses so that they can further assure their enterprise is running clean and clear of internal and external risks.

Learn how DFND provides your organization with greater internal audit insight.