Advantages of Outsourcing Internal Auditing Essay Example
Research conducted by Marc Levinson indicates that outsourcing internal auditing offers numerous benefits, particularly cost savings. This approach has gained popularity among accounting firms and corporations due to its significant advantages. By outsourcing their internal auditing, organizations have successfully saved money.
Studies have demonstrated that outsourcing is a more economical option for an organization than training professionals to outsource, primarily because of reduced operational expenses. This is particularly true when the current staff lacks proficiency in this field. Consequently, numerous businesses have minimized their internal audit costs by utilizing cost-effective external expertise. Additionally, having overlapping audit roles and efforts within the company also helps in cost reduction.
Replacing fixed costs with cost-effective employees enables firms to balance workloads and relocate resources within the organization (Deavers, 1970). Outsourcing internal auditing allows managers to use t
...ime saved to focus on other important sectors in the organization, such as strategic planning (from conducted interview).
This paragraph highlights the benefits of outsourcing internal auditing in organizations. According to Hayes (1999), the process allows for critical analysis of operations and can lead to more efficient processes. Additionally, outsourcing saves organizations time. Marc Levinson supports this point, noting that if human resource management were to handle personnel training for internal auditing, it would take a significant amount of time. Outsourcing also minimizes corruption within the organization, making it a worthwhile investment.
Organizations that do not outsource often experience high levels of corruption due to employees being able to collude and conduct improper accounting audits. This creates opportunities for corrupt practices to flourish. Expert external auditors who have no direct ties to the organization are typically used for internal audits (Kotz, 2004). Outsourcing can reduce staf
and related costs, as it can be expensive for organizations to maintain an internal professional auditing team.
Through outsourcing, numerous organizations have succeeded in cutting their professional staff by 50%, resulting in lower staff compensation costs. This is particularly useful for smaller organizations unable to maintain permanent professional staff and subsequently adopt partial outsourcing. According to Assad and Wasil (1992), outsourcing can lead to increased business efficiency. Additionally, outsourcing has a significant impact on the entire business, including enhanced service delivery, as external experts possess sufficient experience to examine business operations, as stated by Marc Levinson.
Professional external advisors offer valuable guidance to organizational management to improve business operations, resulting in increased effectiveness. One essential aspect of inventory management is warehouse management, which supports effective distribution and meeting the needs of customers. The publication focuses on optimizing inventory distribution and warehouse center operations. From the interview, it is evident that successful warehouse management requires supply and logistics managers to analyze and stay up-to-date on news, movements, equipment, and supply and logistics events.
(Hayes, 1999)
According to Kotz (2004), effective warehousing management enables the relocation of resources within an organization in an efficient and effective manner. This is because it allows for easy access to inventory, which results in time savings that can be redirected to other important sectors within the organization. For example, time saved through outsourcing can be used by managers to carry out strategic planning and critical analysis of supply and logistics operations in the organization. Additionally, good warehousing management practices lead to the efficient management of the supply chain process, ultimately impacting the entire business in a positive way.
According to Gattorna (2003), the supply and
logistics departments are providing effective inventory delivery and services.
- Value Chain essays
- Airbus essays
- Delta Air Lines essays
- Qantas essays
- Accounting essays
- Andrew Carnegie essays
- Automation essays
- Business Cycle essays
- Business Intelligence essays
- Business Model essays
- Business Operations essays
- Business Software essays
- Cooperation essays
- Cooperative essays
- Corporate Social Responsibility essays
- Corporation essays
- Customer Relationship Management essays
- Family Business essays
- Franchising essays
- Harvard Business School essays
- Harvard university essays
- Human Resource Management essays
- Infrastructure essays
- Inventory essays
- Logistics essays
- Management essays
- Manufacturing essays
- Market essays
- Marketing essays
- Multinational Corporation essays
- News Media essays
- Online Shopping essays
- Quality Assurance essays
- Richard Branson essays
- Sales essays
- Selling essays
- Shopping Mall essays
- Small Business essays
- Starting a Business essays
- Stock essays
- Strategy essays
- Structure essays
- Trade Union essays
- Waste essays
- Business Analysis essays
- Business Plan essays
- Community Development essays
- Competition essays
- Effective Leadership essays
- Leadership Styles essays
