Business World Trends

Internal Audit

• According to a survey by the Institute of Internal Auditors (IIA), organizations with strong internal audit functions reported significantly better risk management practices. Approximately 80% of companies with robust internal audit functions rated their risk management processes as effective, compared to only 45% in companies with weaker internal audit functions​ (IIA Home)​.

• Internal audits are critical in detecting and preventing fraud. The Association of Certified Fraud Examiners (ACFE) found that organizations with dedicated internal audit departments discovered fraud faster and reduced financial losses by about 50% compared to those without such departments​ (Emerald Insight)​.

• Companies with strong internal audit functions are more likely to produce accurate financial reports. Research by Deloitte revealed that firms with effective internal audit departments had 30% fewer financial restatements, indicating higher reliability in their financial reporting processes​ (IIA Home)​.

• Corporate Governance Ratings: Effective internal audit functions contribute to higher corporate governance ratings. According to a study published in the Journal of Accounting Literature, companies with comprehensive internal audit practices typically receive better ratings from governance rating agencies, reflecting higher investor confidence and improved access to capital​ (IIA Home)​.

• Board and Audit Committee Engagement: The IIA reports that internal audit functions that engage regularly with the board and audit committees contribute to more informed decision-making and stronger oversight. This engagement ensures that the board is aware of significant risks and control issues, leading to better governance outcomes​ (IIA Home)​​ (IIA Home)​