Finance & Internal Audit
An internal audit is the examination, monitoring and analysis of activities related to a company’s operation. Organisations hire an independent internal auditor to provide continuous review of the effectiveness of risk management, control, and governance processes. Internal audit does this by: Providing independent, unbiased assessment of the operations of the organisation.
When an Organisation grows, lots of challenges also come in the form of Compliance, Controls, and Cost Effectiveness etc. An Internal Auditor provides an assurance that Internal Controls are properly designed and operating effectively to meet all such challenges.
Internal Audit Approach
- Collect and analyse information/ data
- Identify process design gaps
- Identify areas of ineffectiveness
- Perform Testing through analytical and sample testing
- Root Cause for gaps identified
- Report to Management and Board on key findings
Some of the most worrying risks for any national or international organisation are of a geopolitical nature. Some organisations may see geopolitical risks as too complex to deal with internally. Any business that operates outside its home needs a strong understanding of geopolitics. We live in a VUCA (Volatile, Uncertain, Complex and Ambiguous) world.
Due diligence refers to the process of research and analysis that is done before an acquisition, investment, business partnership or bank loan in order to determine the value of the subject of the due diligence or whether there are any major issues or potential issues. The prospective acquirer / investor should obtain all the necessary information within the predetermined time and make sure that he makes a good deal and not a costly mistake.
Our role in a financial due diligence review involves evaluating the proposed deal by analysing the present and historical financial statements including important agreements reviewing the control environment and assessing the risk incidental to the business.
Due Diligence Approach
- Revenue, Profit and Margin Trends analysis
- Competitors and Industry analysis
- Management and Share ownership analysis
- Examine Short and Long term risks
Who should go for Due Diligence?
Before New Investment, New Loans, Mergers and Acquisitions, Third Party Contracts, Business Outsourcing etc.
Enterprise Risk Management
ERM provides a framework for risk management, which typically involves identifying particular events or circumstances relevant to the organization’s objectives (risks and opportunities), assessing them in terms of likelihood and magnitude of impact, determining a response strategy, and monitoring progress.
By identifying and proactively addressing risks and opportunities, business enterprises protect and creates value for their stakeholders, including owners, employees, customers, regulators, and society overall.
- Greater Coverage
- Resources with relevant industry/ subject experience
- Identify fraud prone areas
- Reduce surprises
- Identify cost savings
- Build/ optimize controls
- Identification of Risk like Operational Risk, Strategic Risk, Financial Risk, Internal Risk, External Risk including existing Risk and potential risk
- Risk Assessment is a process to determine the cause of the risk event, the risk event itself, and the impact and the velocity of the risk event. This step actually quantify the impact of existing or potential risk
- Risk Analysis involves Understand the risk, Determine the risk exposure and Formulate risk strategies for the organisation
- Implementation is incorporating an ERM structure, practices, and strategies to fulfil the goals of the organization.
- Monitoring involves communication of risk both upstream and downstream across the organization. It includes periodic reporting and follow-up on the risks by various levels of management, risk committees, and internal auditors
- Evaluation is ascertaining the strengths and weaknesses of the ERM program with regard to the organization’s strategic goals