Archive for December, 2022

There are numerous benefits to conducting an internal audit. However, they can depend on the nature of the internal audit and the type of company that runs it. Generally, though, the benefits of an internal audit are:

  • Increased efficiency
  • Decreased risk exposure, generally from discovering flaws or shortcomings in compliance mechanisms or information technology cybersecurity
  • Discovering internal misconduct
  • Verifying financial statements and other important information for legally-required disclosure

Together, these benefits can streamline a business’ practices, improve its bottom line, shield it from threats, and increase its future prospects. Many businesses that run an internal audit come to see the process as an investment in the company – one that pays substantial dividends in the long run.

The internal auditing professionals at Corporate Investigation Consulting help company executives and stakeholders conduct effective internal audits that produce these benefits.

1. Internal Audits Find Inefficiencies and Propose Solutions

Internal audits often focus on reviewing the company’s business practices, policies, and internal controls. By reexamining them and monitoring how they function, auditors are often able to find inefficiencies and other weaknesses in the system. These can take a huge number of forms, from problems like:

  • Nearly identical job functions being performed by multiple people
  • A needlessly excessive physical distance that has to be traveled by employees from one work station to another
  • Confusing workplace hierarchies
  • Unnecessary levels of oversight or sign-off requirements by supervisors

On a day-to-day basis, these issues and others like them may be little more than an inconvenience for workers. In some cases, they are barely noticeable. Over time, though, they can amount to a significant amount of time and money lost to the inefficiency.

Internal audits look for workplace problems like these and then propose solutions that, if implemented, would eliminate or at least alleviate the inefficiency. In some cases, the payoff for the change would make itself financially worthwhile in only a few months.

In many instances, the findings by an internal auditor come as a surprise to company executives. Their familiarity with their own company often keeps them from noticing how things can change. The fresh perspective that auditors bring to the table – as well as experience with other, similar companies – help them see issues that may have been overlooked and then propose original solutions that solve them.

2. Identify Compliance Shortcomings and Reduce Risk Exposure

Many internal audits focus on a company’s compliance mechanisms, especially in the fields of healthcare and securities trading where the legal obligations imposed by federal and state statutes and regulations are intimidating and onerous. Rather than looking to improve the company’s performance, the purpose of these internal audits is to make sure that the business is complying with the law and is not exposed to the legal liability that can come with noncompliance.

Internal audits like these typically target specific aspects of the company’s compliance obligations, like:

These are all entities that have numerous laws that they need to abide by. Many of those laws impose active requirements that the company has to affirmatively take in order to stay on the right side of the law. Failing to take those steps can expose the company to intrusive investigations, embarrassing allegations, and legal liability in the form of administrative sanctions, civil fines, and potentially even criminal penalties. The steps that have to be taken to avoid these penalties, though, are often vague.

A good internal audit can review the steps that the company has deemed necessary to satisfy their legal obligations and see if they are as effective as they were supposed to be.

3. Detect Internal Misconduct

Another important benefit to running an internal audit is that it can uncover signs of employee misconduct that would have continued to go unnoticed without the inspection. In most cases, that misconduct is merely negligent, like when a worker is failing to uphold their role in the company’s compliance protocols and putting the business at risk of liability. Occasionally, though, that misconduct is deliberate, fraudulent, and potentially even criminal.

These issues can be spotted in audits that focus on compliance mechanisms as well as those that pinpoint the business’ routine practices and policies. The most common first sign of trouble is simply money going missing at a particular point in the process. Generally, the problem is confined to a worker having an opportunity to divert the company’s funds into his or her own pocket and then making the most of it. In some rare circumstances, though, the problem is more widespread, with multiple or numerous employees having a hand in the conspiracy.

Resolving these problems can be tricky, but they can also answer some pressing questions that company executives may have had simmering for a while.

4. Verify Information and Accuracy of Disclosures

Internal audits also help companies by verifying internal information that the company has about its business practices and finances – a benefit that is especially important for companies that are about to issue critical disclosures about how the company is faring.

This aspect of an internal audit into the company’s finances can be an important one to consider when deciding when to start the auditing process. In many cases, the information to be disclosed would have had to be verified, anyway. By making it a part of the internal audit, the company can streamline the ordeal by avoiding a duplicative verification process.

Internal Auditing Professionals at Corporate Investigation Consulting

These are just some of the most important benefits that come with an effective internal audit of your company. Others include the peace of mind that comes with knowing that your company’s compliance protocols have been tested and strengthened, the input that a professional auditing consultant can provide to your company, and the deterrent effect that the audit can have on employee negligence or those who have been eyeing company property for their own taking.

The auditing consultants and experts at Corporate Investigation Consulting can help your company conduct an internal audit that provides all of these benefits. Contact us online or call us at (866) 352-9324.

Companies should regularly audit their employees’ I-9 immigration statuses to ensure the company is in compliance with federal immigration laws and the Immigration and Nationality Act. However, while these audits are essential for insulating the company from legal liability for having undocumented or illegal workers on their rosters, poorly planned audits can actually expose the company to legal liability for retaliating against workers or discriminating against them.

The internal auditing professionals at Corporate Investigation Consulting have helped numerous companies in all industries perform exceptional I-9 internal audits. In this article, they provide a checklist that they frequently use for conducting internal I-9 audits, as well as recommendations for making the audit as effective as possible.

Internal I-9 Audit Checklist

Internal I-9 audits can be done in a variety of ways. They should follow strict and formal procedures that ensure that the process is thorough and fair for everyone, though many companies use a more relaxed, informal process. Regardless, I-9 audits should at least cover the following basic steps.

Collect I-9s to Audit

One of the first decisions that companies have to make is whether they are going to audit all of their employees’ I-9s or just a sampling of them. Obviously, doing them all is more thorough but also more time-consuming, especially if your company has lots of employees. Only doing a sampling of targeted I-9s that are the most likely to uncover noncompliance is a tempting option. However, it can run afoul of anti-discrimination laws and other workplace protections.

Once a decision has been made, the next step is to collect I-9s for:

  • All current, active employees who were hired after November 6, 1986
  • Any terminated employees who were terminated within the last year or hired within the last 3 years, whichever is later

You will also need a list of all current employees as well as those who have been terminated but who fit in one of the criteria, above.

Review Section 1 and Correct Errors

Section 1 of the I-9 Form covers the following information about the employee:

  • Their name,
  • Address,
  • Date of birth,
  • Social Security Number, if they are a U.S. citizen,
  • Email address,
  • Telephone number,
  • Citizenship status,
  • Alien Registration Number, if they are a lawful permanent resident, and
  • If they are an alien authorized to work, the expiration date of their work authorization, as well as their:
    • Alien Registration Number,
    • Form I-94 Admission Number, or
    • Foreign Passport number, with its country of residence.

The Form also must be signed and include an attestation, under penalty of perjury, that the information on it is true.

If there are any inaccuracies in Section 1 of an I-9 Form or if any fields are not filled out, the employer or auditor cannot correct it. The employee must fix the error. According to the U.S. Citizenship and Immigration Services (USCIS) Handbook for Employers, the employee can:

  • Either strikethrough incorrect information or enter the correct or missing information, and
  • Initial and date the alteration.

The USCIS Handbook for Employers also covers other situations that may arise during this process.

Review Remaining Sections and Correct Errors

Sections 2 and 3 of the I-9 Form can be corrected by the employer. These Sections comprise the employee’s name and immigration or citizenship status as well as documents that were used to verify the worker’s:

  • Identity, and
  • Employment authorization.

Similar to the process for Section 1, the employer’s agent should strikethrough or add the information and then initial and date the Form.

Ensure Recordkeeping Requirements are Being Followed

I-9 auditors should also be keeping an eye out for whether the appropriate recordkeeping measures have been followed. For example, all current employees should have an I-9 on file, and the I-9s of recently terminated employees should be kept for the required amount of time.

Complete the Auditing Log

Throughout this process, auditors should be maintaining an I-9 audit log. For I-9 audits, this log should generally have three columns:

  1. The employee’s name,
  2. A description of the errors that were found on their I-9 Form, and
  3. The actions that were taken to correct the error.

The auditing log should then be kept according to the applicable recordkeeping policies of the company and the I-9 Forms returned to an appropriate and secure location with other important legal documents of employment.

Recommendations for Conducting an I-9 Internal Audit

The two most important elements that set good I-9 audits apart from bad ones are:

  1. Bad internal I-9 audits can expose the company to allegations that the audit was discriminatory or retaliatory, and
  2. Good audits satisfactorily show federal law enforcement that the company is taking its compliance requirements seriously.

Avoiding Allegations of Discrimination and Retaliation

When a company audits its employees’ immigration and citizenship status, it can lead to unforeseen and serious repercussions for some employees, but not others. It can also inconvenience certain workers, but not others.

Companies need to avoid both of these issues when they audit employee I-9 Forms.

This can generally be done during the planning stage by:

  • Setting the scope of the audit in a non-discriminatory way, and
  • Setting the timing of the audit in a way that cannot be seen to retaliate against audited employees.

The best way to avoid allegations of discrimination is to audit all employees. When that is not possible or feasible, a metric should be chosen to set the scope that could not be interpreted as discriminatory. One way to do this would be to conduct internal I-9 audits every three years and only audit people who were hired in the last three years – a sampling that is based on seniority rather than any protected class.

Show Law Enforcement That Your Company is Taking Compliance Seriously

Hiring immigrants who are not legally authorized to work in the United States can expose a company to significant legal liability. Showing that your company undertook good faith efforts to ensure that all of its employees were legally authorized to work for the business can make a big difference if immigration officials find unlawful workers on your company’s roster. Documentation of an internal I-9 audit can help to do that.

Internal I-9 Auditing Consultants at Corporate Investigation Consulting

The auditing professionals and consultants at Corporate Investigation Consulting have helped companies both large and small conduct effective I-9 audits of their employees. Contact them online or call them at (866) 352-9324 to get their assistance in running such an audit for your company.

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