What Is an Internal Audit?
Internal audits evaluate a company’s internal controls, including its corporate governance and accounting processes. These types of audits ensure compliance with laws and regulations and help to maintain accurate and timely financial reporting and data collection. Internal auditors are hired by companies who work on behalf of their management teams. These audits also provide management with the tools necessary to attain operational efficiency by identifying problems and correcting lapses before they are discovered in an external audit.
Key Takeaways
- An internal audit offers risk management and evaluates the effectiveness of many different aspects of the company.
- Types of internal audits include financial, operational, compliance, environmental, IT, or for a very specific purpose.
- Internal audits provide management and the board of directors with a value-added service where flaws in a process may be caught and corrected prior to external audits.
- Similar to external audits, internal audits are conducted through planning, auditing, reporting, and monitoring steps.
- Internal audits may enhance the efficiency of operations, motivate employees to adhere to…
