Audit and accounting practices are designed to keep a clear record of all financial transactions, information systems, and operations; they are essential for financial institutions of all sizes. Internal and external audits ensure that practices are applied appropriately, are transparent, and monitor all areas of the business. As microfinance institutions grow in size and complexity, so too does the need for strong control systems to manage operational risk.
Audit and accounting practices are designed to protect both financial institutions and their clients against fraud or other improper accounting. These practices also reassure investors and governments that a financial institution is operating under sound principles. Innovation, new technology, and competition are constantly changing the nature of the financial services industry so institutions must keep pace by making continuous improvements to their systems and operations. With sound audit and accounting practices in place, management, governing boards, investors, and government supervisors can effectively monitor and manage their risk-related responsibilities.