How Internal Audits Drive Business Success

When we talk about internal audits, we are referring to a series of independent activities aimed at evaluating a company’s internal processes. They are essential for verifying that these processes comply with company guidelines, established procedures, and current regulations. In fact, they allow the most common risks to be identified, improving the company’s control and supporting its long-term growth.

This article defines the discipline of internal auditing, shows how it differs from external audits, and explains how the audit function contributes to long-term business resilience and stability across all industries and jurisdictions.

What Are Internal Audits?

An internal audit is an independent and objective assurance and consultancy activity conducted by a team internal (or appointed) to the organisation. Unlike external audits, which attest to financial statements for shareholders and regulators, internal audits examine the design and operational effectiveness of processes, internal controls, and reporting lines for the company itself.

Internal audits drive business success. In fact, their purpose is to identify organizational risks and inefficiencies so that changes can be made. They also enable a better assessment of internal controls quality, providing concrete practices for improving processes and strengthening the confidence of all stakeholders.

The Role of Internal Audits in Business Success

Internal audits automatically create a mechanism of internal accountability. They promote transparency, as managers and employees are aware that all processes are subject to verification and will therefore tend not to engage in improper practices. This mechanism increases the confidence of investors and business partners while improving the overall business situation—often with the guidance of a corporate turnaround consultant who ensures recovery strategies are effectively implemented.

Not only that: an internal audit can also contribute to the improvement of the processes themselves, reducing inefficiencies and waste and ensuring a better allocation of resources. In many cases, an audit highlights early signs your business needs to be restructured, giving management the chance to intervene before financial or operational problems escalate.

Finally, internal audits also help provide a clear vision for management to make informed, objective, and evidence-based decisions. In the long term, this strengthens the company’s economic and financial stability. 

Key Benefits of Internal Audits

Internal audits, therefore, offer a multitude of advantages, not only operational and financial. Here are the main ones:

• Risk identification: Conducting an internal audit allows the company to identify various types of risks. For example: financial risks for better resource allocation, operational risks to reduce inefficiencies and improve processes, and compliance risks to ensure that the company always operates in accordance with regulations.
• Process improvement: By identifying risks, it is also possible to make corrective changes and thus improve the productivity and effectiveness of internal processes.
• Compliance: Constant evaluation of one’s work allows for the analysis of various areas in order to comply with industry standards and ensure adherence with current regulations (e.g., ISO standards).
• Trust and security: The constant internal review mechanism strengthens the trust of investors and business partners. This is because stakeholders know that the company continuously monitors processes, thus reducing misconduct.

Internal Audit Process: How It Works

Internal audit processes are usually structured into four key phases. Let’s analyze them in detail:

1. Planning: This is the initial phase. Here, the company defines its objectives and how to achieve them. In doing so, internal auditors establish a risk assessment plan, deciding which processes or departments to examine.
2. Execution: Once everything has been planned, the execution phase begins. The auditors will collect evidence and documentation and begin the actual review of the processes. Here, the focus is to identify any gaps and make corrections.
3. Reporting: The third phase involves providing the results in the form of a detailed report to the entire management. The document identifies risks, inefficient processes, and recommendations and assessments for improving or removing them altogether.
4. Follow-up: Finally, the last phase involves concrete verification that the recommended actions are actually being taken. The follow-up consists of periodic mini-audits so that the problems do not remain only on paper.

Common Areas Internal Audits Assess

But what are the common areas of internal audit? Among the main areas to be assessed are:

• Accounting, reporting, and financial accuracy: This area is essential for verifying financial statements’ accuracy and transparency. Not only that, but the adequacy of controls and adherence with accounting standards (e.g., GAAP, IFRS, etc.) are also verified.
• Operational efficiency: In this case, auditors analyze the actual use of the company’s resources (technological, financial, and human). The control avoids inefficiencies, waste, and redundancies, allowing for a better allocation of resources. 
• Compliance: Compliance refers not only to obedience with laws, but also with sector regulations and increasingly stringent environmental and ethical policies.
• IT systems and information security: A good audit also verifies the company’s digital security, which is essential for protecting the business from external attacks.
• Corporate Governance and Leadership Accountability: Executives are also subject to an in-depth evaluation. Regulators assess decisions, the clarity of delegated powers, and the level of responsibility of management and the board.

Challenges in Conducting Internal Audits

Even the most effective internal audits encounter difficulties and friction with management. For example, the most common problem is resistance to change.

The second typical problem is the lack of adequate resources and expertise to carry out an effective audit. This can lead to superficial or even inaccurate checks. Another aspect to consider is internal pressure within the company. Audits must be transparent and impartial, based on objective data. However, internal pressures, conflicts of interest, or fear of political consequences can undermine objectivity.

Finally, always remember that multinational companies face additional challenges such as ever-increasing global regulatory complexity and industry-specific risks. For this reason, many boards also integrate risk analysis tools, such as what is scenario planning, to anticipate possible outcomes and strengthen audit recommendations.

How Internal Audits Contribute to Long-Term Growth

The final question that an entrepreneur or business executive will be asking themselves is: how, then, can an internal audit contribute to the long-term growth of my company? Well, the answer lies in operational efficiency and business resilience.

As we have seen, an audit allows you to identify inefficiencies, waste, and redundancies in internal processes, enabling you to make concrete corrections that improve efficiency and productivity. Not only that, but it also contributes to greater resilience in the face of unfavorable economic cycles or periods of stress.

Furthermore, internal assessments facilitate the decision-making process because managers can make better decisions based on verifiable data. Above all, an audit gives the company greater flexibility to cope with external regulatory or geopolitical changes, driving continuous improvement and long-term adaptability.

Finally, periodic checks promote the development of a corporate culture based on transparency and fairness, allowing everyone to benefit from continuous improvement.

FAQs

What is the purpose of internal audits?

Their purpose is to verify the company’s internal processes in various areas (financial, operational, management systems, etc.) while recommending any necessary corrective measures.

How often should internal audits be conducted?

At least once a year for core cycles, with a risk-based schedule for others. High-impact areas deserve more frequent audits; low-impact areas can be rotated.

Do internal audits only focus on finances?

No. The focus includes operations, compliance, IT, data, and governance—anywhere controls and outcomes matter to the business.

How do internal audits support business success?

They strengthen risk management, refine decisions, and eliminate waste—the foundations for long-term efficiency, resilience, and success.

What is the difference between internal and external audits?

Internal reviews evaluate processes for assurance and improvement within the organization itself; external audits independently certify financial statements to third parties. The roles, scope, and reporting lines are different.

References

The Institute of Internal Auditors. (2018). Internal auditing’s role in corporate governance. IIA Position Paper. https://www.theiia.org/globalassets/documents/resources/internal-auditings-role-in-corporate-governance-may-2018/internal-auditings-role-in-corporate-governance.pdf

LogicGate. (2025, April 21). What is Internal Audit? Key Benefits and Best Practices. 

https://www.logicgate.com/blog/what-is-internal-audit-key-benefits-and-best-practices

Eulerich, A. (2020). What is the value of internal auditing? – A literature review. 

https://mab-online.nl/article/50375