The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has hailed the function of internal audit stressing that it removes all doubts about the quality of transactions in a company.
In his keynote address at this yearâ€™s Institute of Internal Auditors Malawi (IIA-M) in Mangochi, MCCCI chief executive officer Chancellor Kaferapanjira observed that internal auditing is a warranty that one can deal with an organisation almost without fear.
â€œThe value of internal auditing is as fundamental as the value of the most valued brands. A famous brand provides you with the assurance that it will deliver on its promises,â€ said Kaferapanjira, at a function themed â€˜Revolutionalising Internal Auditâ€™.
He said the internal audit function substitutes assurance in place of uncertainty and creates trust in the organisationsâ€™ transactions.
Kaferapanjira said the internal audit function reduces the scope of information asymmetry and opportunistic behaviour and also acts as a monitoring mechanism to align the interests of managers with those of shareholders.
â€œAn internal audit function provides an independent check on the work of managers and on the information provided by the managers to shareholders which helps to maintain confidence and trust. Thus, an internal audit function assures shareholders that there is an adequate and effective risk management and internal control system over their economic resources,â€ he said.
Kaferapanjira said since the internal audit function acts as a monitoring mechanism, it helps shareholders to diversify their shareholding because if shareholding is spread widely, observability by shareholders would be reduced and, therefore, there would be more information asymmetry.
The chamber boss said if it were not for the internal audit function, organisations would also not grow because growth of an organisation is accompanied with an increase in players.
But Kaferapanjira implored upon internal auditors to ensure they conduct their duties in an ethical manner and also ensure that there is no breach of trust.
He said the profession may have great international standards, but it all boils down to personal integrity advising that internal auditors must be above board all the time.
Kaferapanjira said much as the government controls a huge part of the economy, the profession in the public sector is in questionable shape because there is a distance between the shareholders (electorate) and the managers (public officers) leading to weak monitoring of public resources.
â€œThe universe of internal audit should expand. The fact that you, internal auditors, are imbued with analytical knowledge and skill sets means that you are uniquely positioned to analyse emerging threats and opportunities in the various organisations in which you work. From such analyses, you assist your organisations in developing appropriate strategies to sustain the organisations,â€ he said.
President of IIA Malawi, Kingsley Mulewa, said time has come for the internal audit function to change and be in line with the changes in the world to be relevant.
â€œConsidering the ever changing business world with its new challenges, it is imperative that the internal audit profession should be responding to any possible gap by understanding its context and coming up with innovative methodologies in carrying out engagements,â€ he said.
Mulewa said other professionals such as economists, engineers can join the internal audit profession and contribute to its growth.
The conference pooled together over 100 local auditors and other high profile presenters drawn from a wide variety of professions.