Many companies and organizations have a department responsible for providing independent reviews of systems, processes, and business organizations. Better known as an internal audit, this report is used to help senior managers and leaders recognize the risks and regulations that can affect their organization. Depending on the critical area that needs to be assessed, different internal audits can be done. Here are some of the most common types of internal audits performed by companies and organizations.
Information Technology Audits determines if information systems have been properly processing their customer information confidentially. This calls for an assessment of IT controls, which includes logical access, system operations, change management, and backup recovery.
Compliance Audits evaluate if federal laws and state regulations are being followed. Not following these rules and policies can have a negative impact on an organization’s financial state due to fines. For example, If companies fail to comply with a law such as the General Data Protection Regulation (GDPR), or SEC AND FINRAlaws, they can be fined up millions of dollars.
Operational Audits are performed to determine if a company or organization meets the expectations made by management. These audits focus on following company policy , organizational goals, expectations and objectives. Often these audits will include auditing to general business rules. Deficiencies in these audits often result in opportunities to improve the effectiveness and efficiency of the organization.
Information System Audits focus on the internal control environment of an organization’s automated processing system. They usually evaluate system system security, inputs, outputs and computer facility reviews. Not only do these audits focus on assessing the existing structures, but they include monitoring and assessing system upgrades and implementations in real-time.
Investigation Audits are performed when there is suspicion of fraud, malfeasance. That and misuse of a company’s assets are the most common reasons for a special investigation. Conflicts of interest and hotline allegations are also examples of investigative audits.
Follow-up audits are done during a period of time after an audit is completed. AI ( assume you mean artificial intelligence. If so an we spell it out?) databases are able to keep track of audit observations and recommendations that are a result of audits. Follow-ups are a great way to evaluate how effective actions and processes have been after the initial audit findings. The timing of these audits is based on the situation and actions required to make improvements.