What Is Internal Audit?
Internal audit is a dynamic profession involved in helping organisations achieve their objectives. It is concerned with evaluating and improving the effectiveness of risk management, control and governance processes in an organisation.
To do this, internal auditors work with management to systematically review systems and operations. These reviews (audits) are aimed at identifying how well risks are managed including whether the right processes are in place, and whether agreed procedures are being adhered to. Audits can also identify areas where efficiencies or innovations might be made. Internal audits are organised under an ongoing program of review and advisory activity this is based on the strategic needs of an organisation.
In the course of their role, internal auditors work across all areas of an organisation. In addition to core areas of financial control and IT, they review the tangible aspects of operations, such as an organisation’s supply chain or IT systems; as well as more intangible aspects such as organisational culture and ethics. In fact, any system that has an impact on the effective operation of an organisation may be included in internal audit’s scope.
Internal audit reports are presented to the CEO and board (via the audit committee) as they provide an independent viewpoint on the extent to which an organisation is poised for success and advice on areas for improvement.
Internal auditors work in all sectors (public, private and not-for-profit) and may work as an employee of the organisation, or through an external service provider.
What is the Difference Between Internal and External Audit?
Internal auditors are often confused with external auditors, however, there are significant differences between the professions. External auditors focus on the accuracy of the annual report and financial statements whereas the internal auditor has a wide reaching brief which considers anything which might be important to an organisation’s success.
More information An auditor is an auditor, right
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Professional Standards in Internal Audit
The IIA provides an internationally recognised framework for internal auditing. The International Professional Practices Framework(IPPF)
comprises mandatory guidance which is required and essential for the professional practice of internal auditing, and strongly recommended guidance which describes practices for effective implementation. These standards apply globally with over 160,000 internal auditors working within the framework.