As CEO and founder of COREDO, I see daily how financial companies in Europe, Asia and the CIS face growing challenges: from strict EU regulations to market volatility in Dubai and Singapore. The role of internal audit goes beyond simple checks; it becomes a strategic tool that strengthens financial resilience and increases the ROI of operations. Our experience at COREDO confirms: companies that implement a systematized internal audit minimize risks and accelerate business scaling. Over the past years, dozens of financial entities have gone through COREDO projects: fintech startups, payment institutions, investment companies and licensed providers of financial services. We have supported clients not only in planned audits but also in crisis situations during regulatory inspections, banking investigations and preparations for licensing.
In this article I will examine how internal audit integrates into the daily processes of financial firms, based on practices the COREDO team has applied for clients in the Czech Republic, Cyprus, Estonia and the United Kingdom. We’ll help you understand how to implement it to reduce costs, ensure compliance with regulations and provide an objective assessment of operations.
Internal audit in financial companies
According to the standards of the Institute of Internal Auditors (IIA), it focuses on risk assessment: internal audit analyzes processes to identify weaknesses and propose improvements. In our work we rely on the combination of IIA Standards, COSO ERM and ISO 31000, building internal audit as a system: from a risk map and control environment to continuous monitoring and an advisory function for management.
The project began with fragmented processes and a lack of unified control. After implementing internal audit, the company was able to standardize financial procedures, speed up report preparation and reduce the number of queries from banks and regulators
Financial internal audit: goals and objectives
financial audit within a company addresses key tasks: internal control of financial reporting, reliability of financial reporting and prevention of losses. The COREDO team carried out such audits for clients seeking licenses in the EU, where regulators require strict compliance.
These projects covered different business profiles – from startups to structures with international holdings, which made it possible to develop universal internal audit models for multi-jurisdictional requirements.
Goals are simple but powerful:
- Identification of weaknesses in accounting and reporting.
- Optimization of accounting policies to reduce costs.
- Control of cash flows to prevent leaks.
Internal audit in risk management
risk management internal audit, risk-oriented approach, where priority is given to high threats such as market volatility or ESG risks. As CEO of COREDO, I personally participate in designing internal audit functions, negotiating with regulators and building audit-frameworks for companies entering Licensing and international markets. In practice, risk-oriented audit means shifting from spot checks to a systemic analysis of processes: financial flows, IT systems, decision-making models and compliance with regulatory requirements.
Assessment of the Internal Control System
Internal audit within a company assesses its effectiveness by checking processes from legal entity registration to licensing. For regulators, banks and investors, it is the effectiveness of the internal control system that is the main indicator of a company’s maturity, not the presence of formal policies
COREDO’s practice confirms: to assess the effectiveness of internal control in financial companies in Asia we use KPI metrics – risk reduction of 20–30%, increased transparency. A client in the Czech Republic, while obtaining a crypto license, underwent our audit, which ensured operational efficiency and compliance with legislation.
Internal Audit in Corporate Governance
corporate governance audit strengthens corporate governance, integrating audit into strategic planning. The role of internal audit here is to provide audit recommendations that improve processes and build a corporate culture of openness.
Internal audit for compliance with regulations in the financial sector has become key to attracting investors, strengthening investor confidence.
How to implement an internal audit in a financial company
Implementation begins with analysis: identify audit risk and prioritize. Steps proven at COREDO:
- Form a team or outsource: at COREDO we offer Legal outsourcing for startups.
- Implement digitalization of internal audit using data analysis tools.
- Measure the ROI of internal audit: calculate using the formula (reduction of losses + optimization) / costs. Our case studies show a 3–5x return in the first year.
- Scale: strategic advantages of internal audit for scaling business in the EU – by scaling internal audit.
Success metrics in internal audit
Innovations in internal audit – digitization and AI for operational audits. The effectiveness of internal audit is measured by KPIs: reduction of financial risks, ROI from implementing an internal audit function, transparency metrics.
Example: in Cyprus, innovations in internal audit processes to reduce costs helped a bank integrate an ESG audit, preventing losses from volatility. How does internal audit prevent losses in times of market volatility? By preventing losses and through internal audit’s role in financial resilience.
Long-term benefits: control and growth
Internal audit increases the company’s financial resilience and investment ROI by providing transparent financial reporting and an objective assessment of performance. In our projects, companies with an established internal audit function were better able to navigate stress periods — regulatory changes, increases in transaction volumes, and investor scrutiny.
In COREDO, we’ve seen how an internal audit function integrates into corporate governance to attract investors; clients in Poland doubled their funding after our audits. How do you measure the effectiveness of internal audit by metrics of risk reduction and profit growth? Focus on KPIs: ROI, risk reduction, operational efficiency.
If you are scaling in Asia or the EU, should you implement an internal audit function? Today internal audit is not a cost center but a management infrastructure without which sustainable growth in a regulated financial environment is impossible. Yes: cost calculations show a quick return on investment. The COREDO team is ready to conduct a deep analysis and implement a systematized approach, as it has for hundreds of clients since 2016.