When you tell someone ”I’m going to start my own business”, you would likely feel a sense of empowerment and nervousness, as well as pride.
If you are setting up your small business, plan everything ahead and prepare for the challenges that the business or the marketplace would throw at you.
In order to do so, you would need an internal audit.
What exactly is an internal audit it is the monitoring, analysis, and examination of tasks related to the business operations, including the structure of the business, behaviors of the employees, and systems of information.
The internal audit helps to identify the problems before they grow bigger, like the attempts of stealing intellectual property. Why is it important?
It allows you to know if your business is going as planned or not, what you should do, and how to effectively manage the risks. It helps also with the laws and regulations in order to assure your business is not breaking the law.
Operational and Financial Discovery:
Starting a new business doesn’t require an internal auditing department. No need to spend that much money when you can use the team you already have in order to gather data about finances and operations.
The team should at least be made of 2 people and they should provide everyone with feasible data to improve the business.
How to execute an internal audit:
To set up an internal audit, follow these steps:
Communicate and establish the objectives and the scope to set an appropriate management.
Understand the business marketplace, including measurements, objectives, interviews and documents.
Determine the risks that are bad for the business:
You can execute the internal audit as a test to see if it is functioning well or not, and what needs adjustments.
Post problems and challenges that the business is facing, in order to negotiate and find a solution for these problems.
Setting up the business process, the data should be analyzed by a specialist of information technology.
What everyone is saying about there is one big thing in many small business is true. In our case, internal audit will do wonders.
Know your issues before correcting them:
Once you discover the issues with internal audits, you can give them attention to fixing them. In general, these functions would benefit a lot from internal audit:
Expenses: if you don’t know where the money goes, you will not know where it is wasted.
Customer service: knowing to what extent a customer is satisfied would help to improve, as well as knowing what they are complaining about.
The quality of the data: cash balance, accounts, inventory reports. This kind of data should be accurately analyzed before it benefits you.
IT security: Safety is a crucial matter, and would benefit you a lot for your working.
Disaster recovery: having a detailed plan for recovery in case of a natural disaster or theft.
Compliance insures the regulations and laws are followed, as well as the compliance with the tax laws.
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