Internal audit examines the business processes of an organization, providing recommendations to strengthen internal controls and optimize efficiency. Often times there is confusion between the role of internal and external audit. When most people think of an audit, they are usually thinking of the annual external audit of the County’s Comprehensive Annual Financial Report (CAFR). The purpose of this audit is to form an independent opinion on whether or not the financial statements fairly present the assets and activities of the County. While the external audit may identify necessary additional controls, the primary deliverable is the auditor’s opinion on the financial statements. In contrast, internal audit focuses on evaluation of business processes.
Internal audit is sometimes asked how we review areas we do not have direct experience in. Internal auditors are trained professionals with many years of experience in evaluating business processes. Certain business processes are more common across industries (i.e. “back office” processes such as purchasing and accounts payable). Other processes, such as the recording of radiation exposure at a nuclear power plant, are not as common. The commonality between both examples is that they rely on an established procedure. Internal audit specializes in learning and documenting such procedures, looking for potential failure points that could lead to financial improprieties, customer dissatisfaction, safety concerns, and/or legal & regulatory issues. Internal audit brings an experienced fresh perspective to business processes. Due to the diversity in types of operations conducted in Adams County, from performing autopsies to building roads, it would not be feasible to have a separate internal audit department with appropriate financial acumen to specialize in each county function.