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Choosing An
Internal Auditor
Recently hailed as the number one career for the year 2007,
Internal Auditors are very well sought after and compensated accordingly.
Because of stricter laws and enforcements due to corporate accounting
scandals, like that of Enron, companies are offering top dollar compensation
to accounting and finance professionals to provide internal audits. As an
internal audit can be expensive, it is wise to allocate and ensure the
availability of funds prior to hiring an internal auditor.
As most companies typically conduct annual or bi-annual reviews of processes
and procedures, in order to remain compliant, and hire internal auditors to
do so, there are times when a government agency will come to audit things
themselves. These are stressful times and choosing the right Internal Auditor
can save thousands in fine and penalties.
There are several factors that should be determined before choosing an
Internal Auditor. First, you must know the role of an Internal Auditor to be
able to match your compliance strategy with the proper education, experience
and know-how to effectively get the job done. Acting as a go-between for
government compliance offices and providing a service to your company, the
internal auditor must be aware of the latest in compliance governance. Therefore,
when you choose an internal auditor, it is your job, that is, you're
responsible for the auditor you choose, to make sure the credentials are
relentlessly checked. Including the human resource department, the chief
financial officer(s) as well as others who make high-level decisions for the
company are good ideas, too.
In order to enhance internal controls and to remain compliant with government
standards, experience has to be the number one criteria when choosing someone
who will have access to all intellectual and physical property records as
well as delicate financial information. When choosing an Internal Auditor,
you should check references, licensing information, and review previous audit
information available. The Institute of Internal Auditors is a professional
organization aimed at providing guidance, certification and educational
research to it's over 130,000 members. This organization serves as a
clearinghouse for checking licensing and references.
Secondly, keeping in mind your companies business needs, the internal auditor
should specialize in the type of auditing you require. For example, if it is
quality management auditing, then the internal auditor should have the
capability to grasp and understand fully your company's business, quality
controls and standard operating procedures. This should be proven by a
consistent track record of QMS audits. If it is risk management or financial
analysis that is required, then, along with being bonded individually as well
as within his/her own auditing company, the internal auditor must be
completely impartial and objective. This ensures that, while no personal
interest is involved, the end result will be to make recommendations, share
downfalls and places where compliance must be tightened to ensure your
organization will pass any type of auditing test.
As reported by NASDAQ, only half of all companies listed on the exchange
actually have in place internal auditor functions. This is a dangerous lack
of practice and could cost so much in fines and penalties, that an internal
audit can look like the cost for a weekend drive to your mother's house.
Sarbanes-Oxley requires the Internal Audit function exists in companies that
have $250,000 in assets or more. It would be a horrible thing if a Cynthia Cooper
wanna-be blew your company apart simply because you didn't hire an Internal
Auditor.
Courtesy : Mr. Kevin Dark
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