What Are The Advantages And Disadvantages Of Internal Audit?

There are many advantages of the internal audit. First of all the main advantage of the internal audit is to eliminate the chances of the frauds. The second thing if the internal auditor is appointed by the organization then they can easily cut down the burden of external auditor to do the audit in the business. So this is the reason for appointing the internal audit for the company. So there are many companies which use appoints the internal auditor for their accounts which can help them to make the true and clear view of the financial statements of the business.

The internal auditor is appointed by the many companies to keep an eye on the staff like clerks and accounts so that they can not make any fraud in the accounts of the company so the benefits of the internal audit is that the account are audited on the regular basis so there are less chances of frauds for the clerks and accountants. So these are the main advantages of the internal auditor. The internal auditor must be a chartered account which can be appointed by any company at any time. So this has become a trend that the public companies have appointed an internal auditor for their company.

Internal auditor is intimately engaged with the company and have a inner knowledge of business process. Auditor has access to the much confidential information and all levels of management.
But internal auditor may have chance to be compromised. Not independent.

The benefit of the internal audit is that proper accounting system is introduced. Accounting system is a chain of activities in an entity by which transactions are processed for maintaining financial record. There is a need of orderly arrangement of personnel, procedures, records, forms and devices to achieve desirable results. The benefit of internal audit is that there is better management of business concern. The auditor can point out the weak areas of management. The goals of business can be achieved if there is proper internal control, internal check and internal audit. It should be noted that management can rely on internal audit for best results.

The internal audit is beneficial top review progress of business concern. The figures of previous years are compared with this year. Moreover the performance results of similar companies can be compared to determine the progress made by the entity. The management can review progress through internal audit. The internal audit is helpful to have effective control over business activities. Control is a management function which relates to supervision and direction of on going activities. The manager concerned can remove the difficulties for smooth working. Internal audit alerts the management for effective control.

What Is limitations Of An External Audit In Nonprofit Organization?

Makes it easier for the external auditor as he audits audited work