An internal auditor can be a great tool to help prevent and detect fraud. The role of the internal auditor can really be what the organisation wants and needs. An internal auditor usually assists in areas of corporate governance and risk management.
An internal auditor can review, test and recommend improvements in controls and processes, test the reliability of the financial reporting process, ensure the organisation complies with standards and legislation as well as deterring and investigating fraud. The board can make use of an internal auditor to cover areas where the board is concerned, is suspicious of inconsistencies or improve controls where gaps or weaknesses exist.
If an internal auditor is appointed he or she needs to be able to report directly to the audit committee or if your organisation does not have an audit committee, a board member such as the treasurer or chair of the board.
For organisations that cannot put a full time internal auditor or have an internal audit department, there are other options. It is possible to either hire an internal auditor on a part time basis (eg. one day a week) or engage the internal audit division of an accounting firm to assist.
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