The news that a parent volunteer for a local high school show choir group had embezzled more than $100,000 is just one example of how important internal audits can be. While we typically think of multi million dollar companies when it comes to talks of embezzlement and internal audits, the fact of the matter is there are many times when groups of all size can benefit from the design and implementation of internal controls to double check finances.
From small school and church group non profits to the largest of multi million dollar companies, it is always important to make sure that you have processes in place to be certain that money and assets are properly managed. Although one hundred thousand dollars may seem like small change to a big company, to a small non profit that kind of money represents hours, and sometimes years, of volunteer hours and organizational work.
The Continuous Monitoring and Evaluation of Controls That Monitor Finances Is Important to Many Groups
With the use of basic internal audit requirements small non profits can make sure that none of their hard earned funds are being misappropriated. Likewise, large businesses and corporations are required by law to make sure that they have the proper risk management and internal auditing measures in place to protect their assets. Without these measures, of course, many groups can find themselves in pretty desperate situations trying to recover losses that can eventually be devastating to a company or non profit group.
Internal auditors perform assurance services, according to the International Standards for the Professional Practice of Internal Auditing (STANDARDS). Defined as an objective examination of evidence to provide an independent assessment on governance, risk management, and control processes for the organization, assurance services are regulated by government agencies as well as other financial institutions.
We live in challenging times and no group, no matter how big or how small, is immune to financial challenges that are caused by someone’s greed and dishonesty. Whether you are a small non profit raising funds for your son or daughter’s high school show choir or you are part of a large corporation, internal audits and other risk management assessments can help you make sure your finances are protected.
