What constitutes a good internal audit?

Key success factors in setting up internal audit systems

In many organisations, internal auditing is still seen as a purely supervisory function, with a focus on identifying errors and rule violations. However, it is now much more than that: an effective audit system is a strategic tool that supports management, highlights risks and makes an important contribution to governance, transparency and sustainable success.

‘A good audit doesn't just look back – it creates insights for the future.’

– Florian Habel

With over 30 years of experience in senior positions in auditing and finance – I am familiar with the success factors, but also the stumbling blocks in setting up effective audit systems.

1. Structural anchoring & independence

In order for internal auditing to fulfil its mandate, it needs a clear organisational link – preferably directly to the top management level. Only in this way can it work independently and perform its function credibly.

In my opinion, good practices for integrating auditing include:

• Direct reporting line to company management

• Clear regulations in the organisational structure (e.g. auditing guidelines)

• Mandate to audit all areas of the company ‘Internal auditing is not a burdensome appendage – it needs a fixed place in the system.’

2. Methodical approach and transparency

A good audit system is transparent, documented and risk-oriented. A robust audit plan, an audit manual and documented standards ensure the quality and transparency of the audit work.

My recommendation based on practical experience: When setting up internal auditing, I work with my clients to develop a customised audit manual and an annual work plan tailored to the client's organisation.

3. Building trust through dialogue

Auditing does not mean controlling employees – it means transparency with them. If you want to build trust, you need communication on an equal footing, tact in dealing with managers and a clear awareness of the role of auditing.

Success factors in the audit process are:

• Clear communication of objectives and procedures

• Confidential handling of sensitive information Objective, solution-oriented reporting

• Recommendations that are feasible and practical

‘Auditing is only effective if it is perceived as a partner to the organisation – not as an adversary.’

4. Professional competence & further development

The world keeps turning – and with it, the risks. A good audit firm develops professionally, adopts new technologies, participates in international exchanges and undergoes regular further training. Florian Habel – lecturer and practitioner: I myself have been teaching students at a university for many years. I also regularly attend international conferences and incorporate the latest findings directly into my projects.

Conclusion: Internal auditing as an investment in the future

A functioning audit system is more than just a duty. It is a tool that strengthens organisations, minimises risks and creates trust – both internally and externally. Whether you want to set up a new audit system or further develop existing structures, I can support you with my experience, systematic approach and sense of what is feasible.

Contact me now – confidentially, competently and without obligation.