Carve Out Efficient Growth Path for Your Business with Internal Audit
In the dynamic Indian market situations, where there is a lot of risk antipathy among the managers and stakeholders but they must take bigger and bolder risks; internal audit can play a vital role.
Over the past decade, bigger companies have struggled to maintain consistent in growth. Similarly, small and medium companies have suffered instability in their earnings and revenue along with a constant threat on their survival in the market.
Understanding the Struggles of Business Organisations
While the market is throwing curved balls at the businesses, top management is growing hostile towards the risk. Managers retreating to short term solutions to problems and increase in bureaucracy have contributed to slow down the performance of organisations.
Another factor that exacerbates the struggle of organisations are growing number of assurance functions. In the past decade, assurance functions including compliance, risk management, legal and audit have doubled up. Government has not only introduced new ones but also accelerated the rate at which the existing ones are amended.
Although these are some factors that can add to the struggles of your business organisation, factors like lack of coordination, slow decision making and focusing on downsides of acting in a risky situation can deepen the problems.
All the audit departments should be aware of the growth hindering problems. Being aware of the issues, helps managers to understand components that are causing them. For consistent growth is ever-changing market, you need to take bigger yet risky growth decisions.
How can internal audit carve a growth path for struggling organisations
An internal auditor can help a business to sustain growth even at the times of market turmoil by identifying the common growth anchors that prevent your organisation from taking right decisions.
Some common growth preventing anchors:
Finance teams and other managers rely on complex finance models to make decisions. But the problem with this approach is that too emphasis on business cases and hurdles lead to debates. Issues are often categorised according to different criteria.
While a comprehensive analysis important, over calculation or reliance on finance models slows down the decision making process. Rather than using acumen, experience and knowledge, managers try to find answers through the cases and models. This limits the possibility of transformational growth of your organisation.
Short term solution approach
If you are a business operating in a complex market, you might be tempted to use short term solutions to the problems that arise in the course of operation to maintain the flow. While constant fluidity might motivate your managers and employees, variance-focused approach hinder growth consistency. This slows down their performance in the long run.
The trick is to use both internal and external targets to make decisions regarding strategic and competitive interests of your business organisation.
Fear of failure
In a stressful business environment, it is tough to take up risky growth projects. Managers are often afraid of failing and thus, abandon the projects when it starts showing signs of failure. These practice may suck out the creative thinking of managers and employees. They might keep shutting growth techniques. Internal audit helps you to set exit signals. So that you get the trigger when it is time to abandon the project.
Small margins are harmful for your business if you are making efforts to grow. Instead of going lean with cost controlling, you need to allocate your resources to the business based on target and strategic importance.
Internal audit helps in simplifying the situation
- Internal audit tackles all the struggles of your business; ceasing all the harm and guiding into the direction of growth.
- Audit on internal level helps in establishing coordination within organisation simplifying assurance reports and streamlining insights.
- Your business can get an assurance over risky projects due to internal audit.