Importance of Internal Assessment of a Company

Importance of Internal Assessment of a Company

Internal assessments are important in ensuring the company is progressing as it should. These internal assessments are conducted by highly trained personnel in their respective areas. This is the reason for a company to hire auditors to work within the company to help them have a new perspective into their operations, aside from the accountants’ perspectives. Internal auditors will, for instance, report irregularities in a company’s books of accounts that accountants may not have seen. Internal auditing is a regular process as opposed to external auditing, which is a once-a-year event. A company is in many cases externally audited once a year. This means that any errors in operations can only be noted after the close of a financial year. Internal auditing is important for noting small improvements in company operations. The internal auditors, at the same time, will be quick to note any errors in the operations of the company.

When the internal auditors have a proper system of record keeping, external auditors have an easier time in auditing the company. External audits will be beneficial to internal auditors and the company at large by confirming or correcting their findings. With a properly managed internal assessment system, the external auditors’ figures will help the company re-evaluate its strategies of achieving goals. For instance, a change in marketing strategies may result in the company making more or less sales. If the strategy results in more sales, the company will be notified by the internal audit team. As a result, the internal auditing as part of internal assessment systems for a company saves the company from unnecessary losses. Internal assessment is important for monitoring the progress of the company in delivering quality services and continuous improvement as required by the clients.