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Internal Audit: Concepts & Benefits

Internal audit is a review of operations and records undertaken within a business by assigned staff to evaluate correctness of records and effectiveness of operations on a continuous basis. It functions as an independent appraisal of an organization's accounting, financial, and business practices to measure and evaluate the effectiveness of other controls as a protective and constructive arm of management. The internal auditor ensures the organization incurs only valid liabilities and makes efforts to find weaknesses in internal controls and checks to suggest improvements, similar to an external auditor. Large organizations often have an internal audit system as an integral part of internal controls, where internal auditing is a staff rather than line function without direct authority over other personnel.

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89 views1 page

Internal Audit: Concepts & Benefits

Internal audit is a review of operations and records undertaken within a business by assigned staff to evaluate correctness of records and effectiveness of operations on a continuous basis. It functions as an independent appraisal of an organization's accounting, financial, and business practices to measure and evaluate the effectiveness of other controls as a protective and constructive arm of management. The internal auditor ensures the organization incurs only valid liabilities and makes efforts to find weaknesses in internal controls and checks to suggest improvements, similar to an external auditor. Large organizations often have an internal audit system as an integral part of internal controls, where internal auditing is a staff rather than line function without direct authority over other personnel.

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mukta
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Concept, Objectives And Advantages Of Internal Audit

Concept Of Internal Audit


Internal audit is a review of operations and records undertaken within a business by specially
assigned staff. It is a post-transaction review to evaluate the correctness of records and the
effectiveness of operations on a continuous basis in an organization by the paying staffs. The
term 'internal audit' has been defined as the independent appraisal of activity within an
organization for the review of accounting, financial and other business practices as a protective
and constructive arm of management. It is a type of control which functions by measuring and
evaluating the effectiveness of other types of controls. Internal audit dealsprimarily with
accounting and financial matters, but it may also properly deal with matters of an operating
nature.
The work of internal auditor is more or less the same as that of external or professional auditor.
Being the employee of the organization, s/he has to see that there is no waste and inefficiency in
the organization. An auditor has to ensure that the organization incurs liabilities in respect of its
valid and legitimate activities. S/he has to make efforts to find out the weakness of the
internal control and internal check system followed in the organization and suggest necessary
improvements.
Many large organizations have a system of internal audit within the organization as a integral
part of internal control. Internal auditing is a staff function rather than a line function and the
internal auditor does not exercise direct authority over other persons in the organization.

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