Importance Of Internal Audit

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INTERNAL AUDIT CONTROLS AND ECOLOGY Dongyeon Koo American University of Kuwait Abstract Internal audit is a crucial assurance activity to evaluate and improve the effectiveness and efficiency of a firm’s operations and management system. Since corporate activities have impact on the society overall, fulfilling social responsibilities including responsibilities for the ecology. Environmental management is believed to have considerable impact on the effectiveness and efficiency of the corporate operations because failure in environmental control system is considered to bring inefficient operations which are one of the biggest concerns of internal audits. In order to increase the access to the environmental factors during the internal audit…show more content…
Internal audit control in essentially related to the evaluation of an organization’s risk management; it evaluates how well risks are being managed within the company. By understanding operation and control system of a firm, relevant technical factors and legal framework, internal auditors can observe specific level of the existing and potential risk. To evaluate the corporate risk, internal auditors assess the quality of risk management progress, processes of internal control and corporate governance, and examine all sectors of the organization. In other words, internal audit assess the risk of the corporation and helps the management to demonstrate that they are managing on the best interest of the stakeholders (IIA,…show more content…
For example, internal auditors can examine the compliance with the C02 emission law as a part of compliance review procedure. However, since the pressure and requirement of stakeholder to fulfill the social and environmental responsibilities and it became one of the main evaluations factors of the stakeholders, need of environmental management, more than just small part of an internal audit, among the company increased. As a result, environmental management system (EMS) appeared as a framework to monitor, manage and improve the organization’s environmental performance. Scope of EMS audit includes environmental policy, environmental objectives, environmental duty of care and reporting, related training, appropriate environmental procedures, and previous audit findings (Radu, 2012). Once it is set, a firm can examine and review the impact on ecological aspect and consistency of its environmental performance with the scope of EMS by performing internal environmental
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