Internal Audit Uniform Rule 25 – Economic Audit
Internal audit uniform rule (IAUR) is an important document for internal auditors, created to provide assurance that an organization’s operational practices are aligned with its strategic and operational goals. This requirement that all internal audits must adhere to means that the uniform rules are regularly updated to keep up with the times and new technologies, laws, and regulations. IAUR 25 is all about economic audit, and it outlines how internal auditors may go about conducting an economic audit procedure.
An economic audit is built on the aim to determine the optimal use of scarce resources. This means auditing the decisions taken in a business environment in order to identify any potential areas of waste and mismanagement and to then present strategies to improve efficiency and efficacy. An economic audit will include a review of the financial, operational, strategic and organizational aspects of an organization, any economic advisors providing advice, financial activities, pricing and customer service decisions. The audit should seek to conduct a comprehensive review of the organization’s processes and procedures to ensure that all resources are used optimally.
The auditors should also take into consideration any external factors which may have a bearing on the organization’s operations, due to the fact that the economic climate and regulations can have a big impact. It is therefore important that the auditor is up to date with the broader economic environment in order to identify any implicit risks or pitfalls which may be present in the organization’s current strategies. This can also include assessing the company’s brand and its associated products and services in order to identify any potential reputational risks.
In terms of the resources utilized during the audit, it is important that the auditor understands the organization’s policies and procedures and has enough knowledge to draw upon in order to critically review and challenge the decisions that have been taken. Expertise in economics, finance, accounting and strategic management are things they must draw upon in order to be able to conduct an effective economic audit. Additionally, the auditor should also be able to analyse the market in which the organizations decision is taken and any competitor that may have an impact on the market.
Objectivity is a key issue when it comes to economic audits, and the auditor should remain completely impartial and independent in conducting the audit. This will help ensure that the results and findings which are produced are accurate and reliable. Furthermore, the auditor should also ensure that any evidences which is gathered for the audit is both professional and efficient, and the results should be produced in a timely manner in order to ensure that the results can be employed in an optimal ways.
Finally, the audit should focus on the needs of the organization and its stakeholders, as well as any potential changes which could be made in order to be more efficient. The aim of the audit should be to not just identify potential problems and waste but to also identify potential opportunities available to the company. Auditors should show a willingness to learn and evolve their methodology as the market and competitive landscape demands.
In conclusion, IAUR 25 sets a clear mandate for the conduct of an economic audit. Auditors should be well-versed in economics and the business environment in order to understand the context within which their examination should take place. Additionally, they should remain objective and independent in order produce accurate and reliable results. Furthermore, they should be looking for potential areas of improvement, as well as identifying any risks which may be associated them.
