Internal Audit — 5 Concrete Benefits for Your Company

What is internal audit and how it differs from external audit

Internal audit is an independent evaluation and advisory function within an organization, regulated in Romania by GEO 75/1999 (for public entities) and by IIA (Institute of Internal Auditors) international standards. Unlike external audit — which verifies financial statements for third parties — internal audit evaluates the effectiveness of internal controls, risk management, and governance processes.

External audit concludes with an opinion on financial statements, while internal audit produces reports with improvement recommendations for management. The two are complementary: good internal audit facilitates external audit and reduces its time and cost. Our audit services cover both components.

5 concrete benefits of internal audit

1. Identifying risks before they become problems

Internal audit systematically evaluates company processes and identifies vulnerabilities: inadequate segregation of duties, missing approvals on large payments, uncontrolled access to IT systems. These risks, if undetected, can generate significant financial losses or regulatory fines.

2. Process optimization and cost reduction

Through detailed workflow analysis, internal audit discovers inefficiencies: duplicate activities, excessive approval circuits, redundant documents. Eliminating these can reduce operational costs by 5-15%, according to IIA Global studies.

3. Compliance with legislation and regulations

Internal audit systematically verifies compliance with legal requirements: the Fiscal Code, Accounting Law, GDPR, labor legislation. Non-conformities discovered in time can be corrected without penalties, unlike those discovered by authorities during inspections.

4. Improved financial control

A robust internal control system, periodically validated through audit, prevents fraud and accounting errors. Internal audit tests the effectiveness of existing controls and recommends additional controls where risk requires it.

5. Preparation for external audit and tax inspections

Companies with an active internal audit function pass external audits and ANAF inspections much more easily. Documentation is in order, risks are proactively addressed, and the management team can promptly respond to any auditor or inspector request.

When does internal audit become mandatory

In the private sector, internal audit is not legally mandatory for most companies. However, it becomes mandatory for public interest entities (under Law 162/2017), credit institutions, insurance companies, and entities with statutory audit obligations that exceed certain employee or turnover thresholds.

Outsourcing internal audit — an efficient option

Not all companies have resources for a permanent internal audit department. Outsourcing the internal audit function to a specialized firm provides access to diverse expertise at a predictable cost. Geseidl consulting includes outsourced internal audit services with quarterly reports and recommendation follow-up.

Need internal and external audit services? The Geseidl Consulting Group team, CECCAR Prahova leader for 18 consecutive years, is ready to help. Discover our services or contact us for a free consultation.