GCCI Head cautions Internal Auditors to frequently consider broader economic risks

Sep 11, 2017 News

What sense does it make having a robust internal auditing system when the company you work for is suffering competitively?
This salient question was recently posed to those persons who attended a seminar that was hosted by the Institute of Internal Auditors-Guyana at Regency Suites on Hadfield Street.
Delivering the feature address at the time was head of the Georgetown Chamber of Commerce and Industry (GCCI), Deodat Indar.
At that conference, Indar challenged the Internal Auditors to start thinking outside of the box.
He said that while it is all well and good to improve internal auditing skills related to governance, inventory and stores management, it is equally important for one to look at broader economic issues that may very well affect the company he or she is auditing on a routine basis.
“It makes no sense to have a strong robust internal system and you are suffering competitively and can face closure. We as internal auditors must be cognizant of the failures of other companies such as Kodak, Block Buster and many others.”
“We must be vigilant of changes in the industry and provide the relevant advice on adapting relevant strategies to mitigate same. But when you give advice, it is important that you know your art. An auditor never wants to look as a novice, which means you have to continuously develop yourself.”
It is on this premise that the GCCI Head proceeded to examine some broad risk areas in Guyana’s economy. Indar said that based on the industry an internal auditor is operating in, he or she can consider what can actually materialize and harm a company financially.

GCCI Head, Deodat Indar

Indar noted that the economy grew by 2.2 percent for the first half of year 2017. Although this is positive growth, the GCCI Head said it seems different from the reality, since most sectors are experiencing some amount of downturn in terms of profits as well as in meeting production targets.
Referring to statistics provided by the Bank of Guyana, Indar related that sugar production is down by 12.4 %, while other crops grew by 2.5%. The livestock sector contracted by 10.9%, while the fisheries industry expanded by 33.2 %. The forestry contracted by 18.2% along with the Mining and Quarry industry which contracted by 4% due to lower declaration.
“Whichever sector you are operating in, examine the risk. If you are evaluating diversification initiatives be mindful of the overall performance, since some industries are performing better than others.”
The GCCI Head said, too, that once an internal auditor performs a high level macro-economic analysis then he or she can pretty much examine the internal risk, threats, opportunities in the market so as to better address gaps in revenue and profits.

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