Even well-run businesses can have blind spots. Processes that seem smooth on the surface may hide inefficiencies, compliance gaps, or risks that only become visible when it’s too late. An internal audit is your chance to take an honest, structured look at how your business operates beyond what the day-to-day numbers suggest.
Unlike external audits, which are usually done to satisfy regulators or investors, internal auditing is for your benefit. It’s a proactive way to strengthen internal controls, reduce risk, and uncover opportunities to improve efficiency and performance.
At Launchbury Accounting & Bookkeeping Solutions, Harry Launchbury, ACMA, CGMA, leverages his experience advising multi-billion-dollar corporations to help small and mid-sized businesses gain the same level of clarity and confidence through their internal audit function.
Whether you’re looking to tighten compliance, protect against fraud, or optimize operations, internal audits provide the roadmap.
What Is an Internal Audit?
An internal audit is an independent, objective evaluation of your company’s internal controls, records, processes, and systems. The goal is to assess whether your business is operating effectively, meeting regulatory requirements, and managing risk appropriately.
The internal audit function adds value for stakeholders, provides actionable insights to improve performance, and prevents problems before they become costly.
What’s the Difference Between an External Audit and an Internal Audit?
An external audit is an independent audit that evaluates a company’s financial information and records. These audits are usually required as assurance for stakeholders (e.g., creditors, investors, regulators, etc.) that a company’s financial statements are accurate and compliant.
As we said previously, an independent audit is for the benefit of your business and looks at your operations and processes. Internal audits aren’t mandatory like many external audits, but are considered best practice.
Who Should Perform an Internal Audit?
An external audit can only be done by a Chartered Professional Accountant (CPA) in Canada. As a Chartered Global Management Accountant (CGMA), our founder, Harry Launchbury, does not offer external audits.
Launchbury Accounting & Bookkeeping Solutions does provide internal audits. While larger organizations may have a certified internal auditor or team of auditors, small and medium-sized businesses can benefit from outsourcing their internal audit function to a trusted accounting professional like Harry Launchbury.
This ensures:
- The internal audit process is objective and unbiased
- Internal audit procedures follow appropriate professional standards
- Findings are presented in a clear, actionable internal audit report
Harry leverages his corporate experience and training as a management accountant to help businesses identify risks, streamline operations, and gain peace of mind.
Types of Internal Audit
There are several types of internal audit, each designed to evaluate a different area of your business:
- Internal Financial Audits – When talking about an internal audit in accounting, we’re generally referring to financial audits. The goal is to verify the accuracy of your company’s financial records and identify gaps in internal control.
- Internal Operational Audits – These audits evaluate your workflows and procedures to uncover inefficiencies or redundant processes.
- Internal Compliance Audits – A compliance audit looks at whether your company is following applicable national and provincial laws, industry regulations, and internal policies.
- Internal IT & Security Audits – A professional assesses your cybersecurity and data protection measures, including access controls and backup procedures.
- Internal Performance Audits – Performance audits compare actual performance to key performance indicators (KPIs) and strategic objectives.
- Internal Special Investigations – These audits examine specific risks like suspected fraud, process failures, or reporting irregularities.
The right internal audit scope will depend on your business’s size, industry, and risk profile. For example, a small professional services firm may focus primarily on financial and operational audits, while a healthcare organization or global e-commerce business might require deeper compliance and IT/security audits.
The Internal Audit Process
A well-structured internal audit process ensures that your audit is efficient, objective, and actionable. Here’s a simplified overview of the key steps:
- Planning and Defining Scope
- Identify areas of focus based on risk, business goals, and regulatory requirements.
- Establish the internal audit scope, timeline, and procedures to be used.
- Fieldwork and Testing
- Review financial records, operational workflows, and key controls.
- Perform internal audit procedures, such as transaction testing, team member interviews, and data analysis.
- Reporting Findings
- Compile insights into a clear, actionable internal audit report.
- Highlight risks, inefficiencies, and opportunities for improvement.
- Recommend corrective actions to strengthen internal control and lessen risk.
- Follow-Up and Continuous Improvement
- Verify that recommended changes are implemented.
- Schedule future audits or ongoing monitoring to maintain compliance and efficiency.
6 Key Benefits of Internal Auditing
Internal audits aren’t just about spotting problems; they create real, tangible benefits for your business, including;
1. Stronger Internal Controls
Internal audits test and improve your internal control systems, making it harder for fraud, errors, or process failures to slip through the cracks.
2. Operational Efficiency
By reviewing your workflows and identifying redundancies, internal auditing can uncover ways to save time, reduce costs, and streamline operations.
3. Enhanced Compliance
Internal audits help confirm that your business is meeting all applicable laws, industry regulations, and internal policies. This reduces the risk of fines or reputational damage.
4. Fraud Prevention and Risk Reduction
A consistent internal audit function minimizes the likelihood of fraud and operational risk by identifying weak points in your processes before they become costly issues.
5. Unbiased, Actionable Insights
Because internal auditors operate independently of management influence, their findings are objective, credible, and focused on the company’s best interests.
6. Improved Decision-Making
A clear, comprehensive internal audit report gives business owners confidence to make informed, strategic decisions that support long-term growth.
Internal Audit in Accounting: Why It Matters for Small and Mid-Sized Businesses
While internal auditing is often associated with large corporations, small and mid-sized businesses gain just as much, if not more, value. Without clear oversight, smaller teams are often vulnerable to:
- Cash flow leaks or untracked expenses
- Inefficient processes that waste time and money
- Unnoticed compliance issues that could trigger fines or penalties
By conducting periodic internal audits, you get a clear snapshot of your business’s financial health and insights to help you operate more effectively.
Partner With a Strategic Internal Audit Expert
At Launchbury Accounting & Bookkeeping Solutions, we provide internal audit services for small and medium-sized businesses, corporations, nonprofits, and registered charities in Alberta and New Brunswick.
Our founder, Harry Launchbury, is a management accountant with global corporate experience. He approaches internal auditing not as a “gotcha” exercise, but as a way to give business owners clarity, confidence, and control over their operations.
Whether you need a one-time review or ongoing support for your internal audit function, we can help.
Ready to Strengthen Your Business With Internal Auditing in Alberta or New Brunswick?
Don’t wait until an external audit or compliance issue exposes gaps in your operations. Proactive internal auditing is the key to safeguarding your business and driving long-term growth.
Book a call with Launchbury Accounting & Bookkeeping Solutions to discover how our tailored internal audit services can benefit your business.