An internal audit is a proactive tool for any business looking to strengthen its operations and ensure long-term sustainability. It goes beyond mere compliance, providing a critical, independent look at your company's processes, controls and risk management systems. By leveraging the expertise of a specialized firm like Praman Advisors, businesses can transform their internal audit from a regulatory formality into a strategic advantage.
Overview:
Internal audit is a systematic, independent evaluation of a company's internal controls, risk management and governance processes. It is conducted by a professional team—either in-house or outsourced—to provide an objective assessment of how well an organization is functioning. Praman Advisors offers comprehensive internal audit services that help businesses identify inefficiencies, mitigate risks and ensure adherence to policies and regulations. Their approach focuses on providing actionable insights that not only highlight issues but also offer practical solutions to improve operational efficiency and strengthen the overall control environment.
The scope of Internal audit covers a large range of area including:-
- Operational Controls: Assessing business processes for efficiency and effectiveness.
- Financial Process Review: Ensuring the accuracy and reliability of financial information.
- Compliance Frameworks: Verifying adherence to legal, regulatory and internal policies.
- Fraud Risk Assessment: Implementing controls to prevent fraud and financial misstatements.
Benefits:
Engaging in a thorough internal audit offers numerous benefits that contribute to a company's health and stability.
- Enhanced Risk Management: Internal audits serve as an early warning system, helping businesses identify and mitigate potential risks before they become significant problems. This includes everything from financial risks and regulatory non-compliance to operational bottlenecks.
- Improved Operational Efficiency: By scrutinizing processes, an audit can pinpoint redundancies and inefficiencies, leading to cost savings and increased productivity.
- Strengthened Corporate Governance: An independent audit provides an unbiased perspective, ensuring that accountability is based on robust systems rather than on individuals. This fosters a culture of transparency and ethical conduct.
- Regulatory Readiness and Compliance: A regular internal audit ensures that your company is always prepared for external audits and is in full compliance with relevant laws and regulations such as the Companies Act 2013 and SEBI regulations for listed entities.
Protection of Assets: By reviewing and testing controls, an internal audit helps safeguard company assets from fraud, mi
Documents Required:
To conduct a comprehensive internal audit, Praman Advisors will require a range of documents to understand your company's financial and operational landscape. While the specific list can vary based on the scope of the audit, common documents include:-
- Financial Records: This includes the company's balance sheet, profit and loss statements and ledgers.
- Legal and Statutory Documents: Copies of the company's Certificate of Incorporation, Memorandum of Association (MoA) and Articles of Association (AoA) along with any other licenses or legal documents.
- Process and Policy Manuals: Documents that detail the company's standard operating procedures (SOPs), internal policies and human resource policies.
- Contracts and Agreements: Vendor contracts, loan documents and other legal agreements.
- Board and Management Records: Minutes of board meetings and any management-level reports.
- Bank Statements: For a review of financial transactions and reconciliations.
Process to Apply:
Praman Advisors offers a streamlined process for businesses to engage their internal audit services.
- Initial Consultation: To start with contact our team for a consultation. You can reach out via our website's contact form, email or phone. During this phase, you will discuss your specific business needs, challenges and the scope of the required audit.
- Scope and Proposal: Based on the initial discussion, Praman Advisors' team of experts will develop a tailored audit plan. This plan outlines the areas to be audited, the methodology and a detailed proposal of services.
- Engagement: Once the proposal is accepted, an engagement letter or charter is signed, formalizing the agreement.
- Audit Execution: The Praman Advisors' team will begin the audit which involves a review of documents, data analysis and interviews with key personnel.
- Reporting and Recommendations: Upon completion, the team will present a comprehensive report with findings, risk assessments and actionable recommendations for improvement. They also provide a personal consultation to ensure you fully understand the report and its implications.
Fees and Timelines:
The fees and timelines for an internal audit with Praman Advisors are not fixed and depend on several factors including:-
- The size and complexity of the company's operations.
- The scope of the audit (e.g. a complete assessment vs. a targeted review of a specific department).
- The volume of transactions.
- The number of locations.
Praman Advisors provides a transparent, personalized quote after a thorough assessment of your specific business needs.
Manju Laur: 📞 +97119 94042
The timeline for the audit can also vary but is generally agreed upon in the initial proposal. The firm works to provide a realistic timeline, considering factors like the promptness of document submission and the complexity of the audit.
Frequently Asked Questions
No, internal audit is only mandatory for certain classes of companies as per Section 138 of the Companies Act 2013. However, even if not mandated, it is a crucial best practice for any business aiming for sustainable growth.
Yes, but many companies, especially Small and Medium-sized Enterprises (SMEs), choose to outsource their internal audit to an independent firm like Praman Advisors which will not only ensure an unbiased and objective assessment but also free from internal pressures or conflicts of interests.
While an annual audit is a common practice, the frequency can vary based on the business's risk profile and industry. For dynamic or high-risk operations, a quarterly or bi-annual audit might be more beneficial.
An internal audit focuses on improving internal operations, risk management and governance, with findings reported to management and the board. An external audit, on the other hand, is an independent audit of the company's financial statements to provide an opinion to shareholders and regulatory bodies. The two are complementary and a strong internal audit can make the external audit process smoother and more efficient
