Have you heard? “May is Internal Audit Month”

Kagiso Khutsafalo, Head: Internal Audit, Bank Gaborone

It is Internal Audit month! Every year, in May, Internal Auditors around the world take the opportunity to raise awareness of the critical role that the Internal Audit profession plays in businesses, as well as to recognise and honour our invisible heroes of the profession.

What is Internal Auditing and what purpose does it serve? Internal Auditing is a form of independent verification and consulting that aims to add value by improving an organisation's operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control, and governance processes. The Internal Audit functions autonomously and reports to both the head of the organisation (administratively) and the Board (functionally). The function has an audit charter and annual plan, both of which are approved by the Board Audit Committee.

Governing bodies and senior management rely on Internal Auditing for insight and objective assurance on the following:

• Ensuring that internal controls are adequate to mitigate the organisation’s risk.
• Ensuring effective and efficient governance and risk management processes.
• Ensuring strategic goals and objectives are met.?

Internal Auditors can save their organisation money and protect its reputation by identifying wasteful spending, operating inefficiencies, fraud, and non-compliance with laws and regulations.

Additionally, they keep an eye on the corporate climate by assessing risks, promoting ethics, analysing opportunities, and apprising the Board and senior management about critical issues. Typically, Internal Auditors have diverse backgrounds and skill sets. Their focus is broad and includes, but is not limited to:

• Risk management
• Corporate governance
• Organisational/strategic objectives
• Operational effectiveness and efficiency
• Compliance with applicable laws and regulations
• Financial statement accuracy
• Fraud investigation

It is imperative that Auditors provide consulting services for new projects, to ensure that risks are considered and controls are embedded in the process beforehand. They are also able to provide insight and advice regarding strategy; however, management must maintain ultimate responsibility for the processes in their area.

The Internal Audit work is guided by the International Professional Practice Framework (IPPF). Conformance to the IPPF necessitates upholding its mandatory components, which are the Standards (International Standards for the Professional Practice of Internal Auditing), the Definition of Internal Auditing, and the Code of Ethics.

The Institute of Internal Auditors (IIA), as the global guidance-setting body, has released new standards in January 2024, and they will come into effect in January 2025. Internal auditors should take this year of 2024 to study the new standards, workshop their teams, and ensure alignment by the beginning of next year, 2025.

Special thanks to the Board, Management, and Staff of Bank Gaborone and all stakeholders for supporting the activities of the Internal Audit function. Cheers to all Internal Auditors across the globe!