What is the impact of internal audit on firm performance?

Internal audits in modern society is a significant alternative for the optimization of the firm's financial performance. There has always been an advance in the way of achieving regard on what the audit standards the government and its respective offices ought to apply. The internal financial audits help in preventing the financial scandal that can arise in any company. Auditing is therefore regarded as the key element in the application of the accounting systems which in turn helps in the analysis of the work done in the financial departments (Awdat, 217). It is considered as the backbone of the business accounting since it a section mandated to keep records of the businesses directly related to the given company.

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The cooperate strategy and the financial systems of a company underpinned by appropriate systems within a firm in which the internal audit play a significant role in enhancing the reliability of the internal control systems. In essence, the internal auditing adds on the achievement of the company's objectives as well as the full implementation of their achievements strategies. Besides, internal audit is responsible for the management's reinforcement and audit committee (Al-Matari et al., 35). Worldwide, organisations no longer create internal control framework as a necessity in administration and additionally, because it is crucial in guaranteeing that all the exercises in the administration are effectively completed.

Organizations nowadays demand for a polished methodology and credible competency from internal audit. It is therefore noticeable that in any firm, for optimization of its predetermined goals, a viable internal audit function is one of the most grounded devices in screening and improvement of the organization's performance (Octavia, 2). Internal audit results are the board of directors, and the concerned administrations in the units inspected. Hence the study of the above topic will aim at measuring the impact of the direct application of the corporate governance pillars in the quality of internal audit which has a direct relation to the performance of any firm.

Keywords: Internal auditing, firm performance, financial systems and cooperate governance

Works Cited

Awdat, A. "The impact of the internal audit function to improve the financial performance of commercial banks in Jordan." Research Journal of Finance and Accounting 6.3 (2015): 217-225.

Al-Matari, Ebrahim Mohammed, Abdullah Al-Swidi, and Faudziah Hanim Binti Fadzil. "The effect of the internal audit and firm performance: A proposed research framework." International Review of Management and Marketing 4.1 (2013): 34-41.

Octavia, Evi. "The effects of implementation on internal audit and good corporate governance in corporate performance." 2nd International Conference on Business and Economic Research (2nd ICBER 2011), 2011.