internal audit

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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 ?
Award: Jacob Flournoy, internal audit director for the University of Arkansas System, has been selected to receive the American Institute of CPAs' Outstanding CPA in Government Impact Award for impact on state government.
As companies have come to accept that market volatility, complexity, political and regulatory changes are here to stay, internal audit functions have more opportunities to contribute to businesses in a truly meaningful way, according to the PwC Internal Audit State of the Profession 2013 survey.
Stakeholders Demand Increased Internal Audit Involvement in Risk Identification and Management
Although management holds primary responsibility for risk assessment and internal control, internal audit, according to Hirth, has always been another layer of protection to mitigate risk.
Internal audit working papers and internal audit reports are prepared for internal audits, so these would not necessitate extra effort on the part of internal auditors.
This article highlights recent internal audit-related problems that were revealed in SOX Section 404 reports and offers specific recommendations for building an effective, value-adding internal audit function.
Ensure that the Office of Internal Auditing's annual internal audit plan identifies the internal audits of state agencies or divisions of those agencies scheduled for the next fiscal year
Numerous headlines regarding recent litigation cases tell the tale: a strong internal audit group can be the most effective weapon for stopping fraud in its tracks.
Liu said the Mayor's Office generally does not receive internal audits of semi-independent city departments such as the DWP.
Internal audits allow the foundry to continuously study the system, pinpointing and eliminating problems and searching for ongoing improvements.
Instead, it would generally exclude an auditor from performing both external and internal audits for the same client.