Published On : Tue, Dec 12th, 2017

Industry should adopt Internal Audits in their own Interest – CA. O.S Bagdia

Nagpur: In the recent times, the importance of Internal Audits has increased substantially. People have started realizing the importance of having strong internal controls along with effective Internal Audits. Audit is normally understood to be restricted to only Accountancy but actually it is a very wide concept said Internal Audits is a very effective tool and should be adopted by Industry in their own interest CA. Omprakash Bagdia. He was speaking as a Chief Guest at a Seminar organized by Nagpur Branch of ICAI. He added that Auditors should always explore and should give multiple suggestions specially when they are working with the management as Internal Auditors. We should continuously review the existing performance of the industry and required suggestions should be given to the management.

The job of Internal Auditor is not restricted to any particular field. CA’s should try to act as a complete solution provider which will definitely make the Internal Audits more impactful. Also it is required that detailed SWOT analysis should be done to understand the Strength, Weakness, Opportunities as well the Threats which can be of immense benefit to the client. Normally, it is seen that the management is more interested in understanding the financial risks and related aspects through Internal Audits. It is important the CA’s should realize the importance of other risks and should explain the management which will make the Audit more effectual. We should always explore about the other risks associated with the Industry and should alert the management about the same in timely manner. In almost every sector, possibility of fraud is very high. For that, again effective Internal Audits can be very helpful in identification of such fraud prone area with development of strong internal controls.

Every Industry has a different style of working and has various unique things. It’s important that detailed study should be done of the particular industry and should identify the best practices. Regular and detailed study of all such things will help us to discharge our responsibilities in a better manner. After detailed Audit, reporting is another important area and we should try to prepare a detailed report in a systematic manner. The language of the report should be kept lucid so that the management as well as the staff find it easy to understand. The role of Chartered Accountant is not restricted to only submission of Audit Report. To really add value to the assignment, it is equally important to discuss with the management the various findings during the Audit.

Necessary compliances with regular follow are equally expected from a strong Internal Audit. In every Industry, there are multiple ways of doing the business and the compliance. For smooth functioning, it is very important that there should be very strong internal controls as well as strong system which should be designed and should be implemented. Here again the Chartered Accountants can play a very important role with the management in designing and implementing the internal system. All what is required that Auditors should explain the importance of the Internal Audit with the management which will help them to adopt the same for the betterment of Industry.

Chairman of Nagpur Branch of ICAI, CA. Sandeep Jotwani in his welcome address mentioned that there was time when the job of Chartered Accountants was restricted to only compliance practice. Though Chartered Accountants are good in understanding Taxation Laws and can do well in its compliances, but with time Industry has realized the effectiveness of Internal Audit done with the help of Chartered Accountants. The number of taxation compliances is increasing day by day and for doing the same in timely manner, strong internal controls are very much required. Strong Internal Control also with regular review through Internal Audits has definitely proven the usefulness of Internal Audits in timely compliances and avoidance of penalty.

CA. Nitin Alshi and CA. Bharat Jeswani deliberated on the topic Internal Audit – from Analytics, Consulting to Fraud Detection.

CA. JIten Saglani co-ordinated the program. Prominently present on the occasion were CA.Umang Agrawal, CA. Suren Duragkar, CA. Saket Bagdia and members in large numbers.