When the firm reaches a certain size, it will be necessary to establish a type of additional procedures: the control procedures having the purpose of ensuring the direction of the smooth running of operations. To measure and remedy any discrepancies that may exist between the reality and the requirements of the operational procedures, an inspection service will be established. The inspection, therefore, does not have to interpret the control procedures but to guarantee the correct application, possibly through sanctions.
Added to this is the management control whose primary function is to ensure that the activities go in the direction that will enable the organization to achieve its objectives. These three pillars – procedures, inspection and management control – together they form what is called internal control, the purpose of which is to control the functioning of the organization. In principle, internal control is not intended to improve the functioning of the structure in which it is integrated. It is therefore devoid of any critical dimension.
It is at this level that the audit appears as “the control of the control systems” or as a second-degree control. In particular, the audit must determine whether the operating procedures are correctly defined, whether the risks have been adequately assessed in the context of internal control and whether the management control system is based on appropriate indicators.
Successive amendments that arose recent years regarding the management of public institutions (i.e., the evolution of a purely static to dynamic administrative management) have created the need for a body can advise the management in the execution of its tasks. An internal auditing consulting service is ideally suited to this “notice function.”
In the wake of the first X-ray examinations or analyzes of public institutions grew request an internal audit in the public sector. The fundamental task was the continuous critical analysis of the functioning of public sector entities. Auditors were expected to adapt the requirements of an effective and efficient public service to the specific culture of the department.
The continuance of an organization depends on its ability to fulfill its objectives effectively, this applies both to a commercial enterprise for a public organization. This pressure is probably less radical in its effects in the public sector, but it is nonetheless essential as the citizen demands more and more of the State to hold him accountable for his activities.
Public organizations must, therefore, become dynamic to meet the requirements of a diverse and ever-changing environment. This reality explains the reforms that our public administrations have been experiencing for several years. These reforms are indispensable, but they are neither easy to implement nor risk-free. In the process of reform, fundamental points of reference relating to the identity of the organization can be lost. Because of its unique position in the organization, internal audit consulting services play a vital role in the reform process to guide and monitor it.