1. Internal Audit’s presentation in a Private Company or Non-Profit
organization
Summary: An internal audit function is typically seen by financial executives as a best
practice, and in the case of a publicly-traded company, an internal audit group can be a
necessity. Recently internal audit’s role has been varied, but most internal audit groups
have spent a significant amount of their time dealing with the requirements of SOX.
Where then does internal audit fit into a private company or a not-for-profit
organization?
Internal Audit’s Role in a Private Company or Non-Profit- "The auditing department is
identifying situations where there is waste in terms of financial resources. also
identified ways in which improve operating efficiency and reduce the workload."
In a Private Company or Non-Profit organization internal auditors role is very important,
an internal auditor can found the actual problem on those company so that management
can take a vital function that would be helpful for company position, that can possible
for internal auditor, also In public traded companies having to do financial audits,
nonprofit organizations must perform a separate compliance audit. In order to
understand the difference between the two, let’s create an example with a legitimate
transaction. Suppose for all checks submitted, there must be two signatures required.
This particular check has only one signature of approval. For a regular audit, the auditor
can use common sense and approve the check based on the belief of its legitimacy. In a
compliance audit, there are no exceptions. The check requires the dual signatures and
cannot be approved
Internal audit had a reputation for focusing primarily on an organization’s financial
statements and the internal controls directly affecting the financial statements. That is
no longer the case. Modern internal audit groups are beginning to become more of a
“risk-based” function. Governing bodies and management have been asking the question
“What are our organization’s primary risks, and are we covered?” Obviously some of
these risks are related to reporting accurate financial statements, but what about
strategic, operational and financial risks? In other words, internal audit groups are
beginning to focus more on what could truly “bring an organization down.”
Consider your organization’s strategic and operational goals. One of the key roles of
management is to ensure that an organization’s strategic and operational goals are
clearly communicated to the organization and the appropriate tactics are taken to
ensure these goals are met. In addition, management should be keenly aware of the risks
the organization faces that may impede the accomplishment of these goals.
Internal audit’s role in this situation is to help management and the Board clearly
articulates these risks and further ranks these risks in order of impact to the
organization and their likelihood of occurrence. One of the common problems faced by
most organizations is the existence of “silos” or independently operating groups or
divisions. Internal audit helps to break down some of these barriers within an
organization around risk identification. In addition, given internal audit’s independent
position within the company (typically, internal audit reports to the Board or audit
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2. committee), the Board can be assured that it is receiving an unbiased identification and
ranking of its organization’s key risks.
In addition to simply identifying and ranking these risks, internal audit can help assure
management and the Board that the key risks are appropriately controlled. For instance,
a key risk of many private companies lies within its ability to obtain operating capital,
especially in an economy in which capital is difficult to obtain. Internal audit could help
ensure that the company has good controls around its treasury process so capital is
available when needed. Internal audit also plays a significant role in organizations that
are highly regulated. Internal audit can help ensure to management and the Board that
the organization is taking the appropriate steps to ensure compliance. In the case of a
non-profit, internal audit can help to ensure that the organization has not deviated away
from its charter, thereby helping to ensure its tax-exempt status is not at risk.
Almost every organization, whether it is a privately held business, a publicly owned
corporation, or a nonprofit organization, must prepare financial reports. These reports
are like the lifeline of a company and help owners and managers make decisions and help
provide the company’s financial status to shareholders, employees, regulators, and the
public. A key to a successful internal audit function is the ability of the group to clearly
understand the strategic goals and operations of the company or organization by
possessing knowledge of the industry & most modern internal audit groups are multi-
disciplinary in nature and include representatives from not only finance, but also
information technology and operational experts.
Conclusion: Internal controls aim to prove that the company’s financial statements are
accurate and reliable. Internal controls can be categorized into two areas –
administrative and accounting. Administrative controls deal with the procedures and
records that lead to management’s authorization of transactions. Accounting control is a
set of procedures and records that involve safeguarding assets and the reliability of
financial records.
About The Author:
Mohammad Wahid Abdullah Khan (MBA, CPFA, CPIA, CFC)
Dhaka, Bangladesh
Home Page: http://wahidbd.page4.me
MOHAMMAD WAHID ABDULLAH KHAN Dhaka, Bangladesh, is a PhD Candidate in
"Criminal Psychology" as well he is “freelance Author, online columnists, Human
psychoanalyst, industrial psychotherapist, Certified Financial Consultant, & Certified
Forensic Accountant, too dynamic entrepreneur, utilize creativity leadership and
teamwork to design and execute solutions that creates customer value.
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3. Moreover Mr. Khan is CEO & Certified Consultant of” Wahid & co, Wak Business
Solutions, Wak Business Support, “Wam Associates” & leader of the” Wahid Consulting
Group”; Prior to consultancy Mr. Wahid has fulfilled more than 14 (fourteen) years
working in various fields of Business like - Accounts, Finance, Auditing (Internal &
External Audit), Project budgeting and Project costing related positions in some of the
largest group & join venture companies in Bangladesh. Which experience encouraged him
to work as a “professional consultant” from a few years,
Mr. Khan is realistic and implements his assignment within the bounds, objectives and
capabilities of the organization. His extraordinary quick understanding of strategic
options helps find direction and supports management in decision making. He has a “doer”
attitude and gets things done on the technical and functional side. As a “Consultant” Mr.
Wahid believe that his study & physiological motivation is very strong, as well my
confident level is high & my quantitative skills are well-built also he is crystal clear about
my every single goal which helped me to be a very tough contestant “Consultant” in the
business consultant arena
Professional Membership:
• Associate Member – Institute of Management Consultants Bangladesh (IMCB)
•Member- Association of Proposal Management Professionals® (APMP®)
• Member – The Next level Purchasing Association.
•Member- The Chartered Institute of Personnel and Development (CIPD)
• Member - The Professional Risk manager’s international Association (PRMIA)
• Affiliate Member- Global Association of Risk Professional (GARP)
• Member - The International Association of Risk and Compliance Professionals (IARCP)
• Lifetime Member - Dragon fire martial arts association “International” (DFMAA)
• Individual Member: License Logic LLC
• Associate Membership - The American Psychological Association (APA)
• Member - The Global Community of Information Professionals
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