Internal audit function for charities
Given the new set of regulations in the charities sector, more and more charities are implementing an internal audit function as they are becoming more complex and diversified. In this article we will guide you through the main aspects of internal audits for charities.
What exactly is an internal audit?
Internal audits are conducted in order to make sure that all processes regarding an organisation’s risk management, governance and internal control are operating effectively. Internal audits look beyond financial risks and statements and deal with a range of aspects such as an organisation’s brand reputation, how it treats its employees, its growth and environmental aspect.
The role of internal Audit in the charities sector
Internal Audits are essential for not for profit organisations and charities as they help identify risks and optimise performance, especially in challenging environments. Internal Audits are important for charity organisations as they help reach strategic objectives more efficiently and meet Charity Commission requirements. Internal Auditors help charities manage various risks such as corruption, fraud risks, health and safety risks, non-compliance risks. Moreover, an effective Internal Audit is both an enabler of improvement and a facilitator of risk management, assisting charities in the identification of weaknesses and best practices.
How to select internal auditors and what does the process look like?
Several charities choose to outsource their internal audit process to best draw on specialist internal audit expertise. Outsourcing the Internal Audit function can bring several benefits such as more value at lesser costs, access to expertise and increased independence. Internal Audit processes can be outsourced to accountancy firms at an agreed fee.
The Internal Auditor’s job is mainly to draft critical analyses regarding a charity’s risk management & governance status. Few key processes of an internal audit include
- Strategic Internal Audit planning
- Specialist reviews of resourcing, planning, monitoring of processes, reporting
- Forensic audit
- Review of policies and procedures
- Business continuity audit reviews
- Payroll audit
At Ormsby and Rhodes we are specialised in providing outsourced Internal Audit services to charities and not for profit organisations. Get in touch with us today to request a FREE consultation and we will discuss your Internal Audit needs with you.