What is the Connection Between Internal Control and Internal Auditing?
Internal control and internal auditing are closely related and both play important roles in ensuring the effective and efficient operation of an organization.
Internal control is the process put in place by management to provide reasonable assurance that the organization achieves its objectives and goals. It is designed to identify, assess and mitigate risks to the organization by implementing policies, procedures, and controls. Internal control aims to ensure compliance with laws, regulations, and ethical standards, as well as safeguard the organization’s assets.
Internal auditing is an independent and objective assurance and consulting activity designed to add value and improve an organization’s operations. Internal auditing helps an organization achieve its objectives by providing insights into the effectiveness of risk management, control, and governance processes. The internal audit function evaluates the design and effectiveness of internal controls, identifies areas for improvement, and provides recommendations for corrective actions.
In summary, internal control is the process designed by management to achieve the organization’s objectives, while internal auditing provides an independent and objective assurance and consulting activity to evaluate the effectiveness of internal control and identify areas for improvement.