internal audit


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Related to internal audit: internal control

Internal Audit

The process of reviewing business activities in-house to identify inefficiencies, reduce costs, and otherwise achieve organizational objectives. Internal audits may investigate potential theft or fraud and ensure compliance with applicable regulations and policies. They also assist in risk management. In a large company, especially a publicly traded one, internal auditing is conducted by a board independent from any management and answerable only to an audit committee, a subcommittee on the board of directors. The growth of internal audits accelerated following the 2002 passage of the Sarbanes-Oxley Act, which increased the accounting regulations for public companies.

internal audit

The examination of a company's records and reports by its employees. Internal audits are usually intended to prevent fraud and to ensure compliance with board directives and management policies. In contrast, the financial statements presented to stockholders are typically prepared by outside parties to ensure absolute objectivity. Compare external audit.

internal audit

see AUDIT.
References in periodicals archive ?
The seminar was attended by the delegates from Internal Audit departments of SAARC central banks and was addressed by international as well as local speakers who shared their invaluable knowledge and experience.
PwC's report highlights four key areas that enable internal audit to contribute to their organizations' strategic and transformational initiatives:
Jordan said internal audit can add value by facilitating discussion among compliance functions within an organization such as legal, human resources, and IT.
Information technology acceptance in the internal audit profession: Impact of technology features and complexity International Journal of Accounting Information Systems, 10: 214-228.
How involved can or should internal audit be in these areas while maintaining the requisite focus on financial reporting and internal controls?
The supervisor of the department of internal audit has to have a list of objectives, authorities, and responsibilities of the department.
A study of 150 companies by Carcello, Hermanson, & Neal (2002) revealed that 18% of audit committee charters discussed the audit committee's duty to assess the independence of the internal audit function.
In this particular situation, internal audit has the unique opportunity and multi-leveled role in the conversion process.
An 'expectation gap' has emerged between the capabilities the existing model represents and what corporate leaders now need them to provide - traditional internal audit functions focus on what is or what was, and not on what will be.
Internal audit budgets, staffing, and boardroom exposure have increased (Carcello, Hermanson, and Raghunandan 2005), and the Institute of Internal Auditors (IIA) has seen an explosion of membership and interest.
Upon request from the Office of Internal Auditing, each state agency must provide access to all records and documents necessary for the performance of an internal audit.

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