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 ?
He pointed out that SBP had invested heavily in getting the right skills and expertise for its internal audit function.
Effective working relationships between audit committees and internal audit, J manage Gov DOI 10.1007
Accepting the need to carry out internal audit functions doesn't necessarily mean hiring staff to do it.
* Reinforce internal audit's objectivity and independence, and its accountability to the audit committee.
The shift in focus means internal audit groups are altering their recruiting to put less weight on accounting expertise and more on understanding the company's business.
The supervisor coordinate the efforts of both the internal audit department and external auditor.
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.
Oftentimes internal audit will be able to help corporate leaders identify, assess and monitor progress against items on this list and identify opportunities for business performance improvements.
Brendan Nelson, audit committee chair at energy giant BP, said: "One of the best ways to help organisations better protect their assets and manage risk is to boost the status, standards, scope and skills of internal audit.
Academic research in internal audit provides best practices and pertinent information for external and internal auditors.
The event brought together over 30 internal audit leaders including government auditors, risk managers, statutory auditors, and compliance professionals and from the university.

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