by Vickie Gross

Created on: September 01, 2011

The proper procedure for conducting an internal audit can vary from one business to the next. A business will often set its own internal audit policies and in-house protocols. Proper procedure begins with auditors who are up to date with the company's policy and the audit procedures currently in place.

Company policy/Right to self-govern:

Company policy is an in-house guide to govern and regulate the flow of its business and practices. Since businesses can vary greatly in size and services, an auditor must become familiar with each specific company's' policy as applicable. Company policy is of particular significance and guidance to an auditor. A large business requires much more policing and timely oversight than a sole proprietorship. Both of these entities will have differing procedures for conducting an internal audit review.

Examples of various internal audit procedures:

Hotel chains may utilize nightly audit procedures via in-house employees referred to as night auditors. Small business owners may conduct their own internal audits on a weekly, monthly, semi-annual or annual time frame. Large businesses that house numerous departments, systems and employees, will usually have an in-house audit group to overview and timely assist in identifying departmental, systemic, and/or financial issues. Many large businesses will also retain external auditors, for a fee, to help provide a more unbiased audit review of the overall business infrastructure and financial standing.

Once an auditor is familiar with a company's internal auditing system, he or she will be better equipped to properly proceed with audit formalities. A basic overview to the internal audit procedures within a large business can often be represented by the following outline along with company defined checklists:

1.) Preliminary discussion and risk assessment: Company discussions with key personnel are necessary to help discern and to identify areas that may be at risk or could benefit from an audit review. This meeting is intended to assist the auditor, or audit department, in forming a proper audit outline.

2.) Notification and scheduling: Once the audit outline has been formally prepared and approved by key personnel, notifications are sent out to the departments that are to be audited. Appointments for interviews are set to afford the least amount of distractions. Auditor(s) will pre-inform the person(s) to be interviewed of the materials or documentations that will be required at the time

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