Internal audit may be defined as an evaluation and analysis of a business operation that is conducted by the internal audit staff of the same business entity. Internal audits are considered as a part of the overall system of internal control that is established in an organisation and is conducted by professional internal auditors present in the company. This gives the management an assurance concerning the control process in the organisation and helps detect inefficiencies or fraud early. This article talks about the Internal Audit of Companies and the various aspects surrounding the same.
In large organisations, an internal audit is carried out by a team of professionals who are employed within the organisation. Although not mandatory, it is generally conducted with the aim to evaluate the effectiveness of internal control, the soundness of the financial system, efficiency of business processes, and so on. Internal Auditing is an independent, assurance, objective and consulting activity that is formulated to add value to and improve a particular organisation’s operations. Further, internal audits also help a company to accomplish its goals by bringing about a systematic and disciplined approach to improve the effectiveness of an organisation’s risk management, corporate governance and internal control processes.