Internal audit is a management control. The department reviews the effectiveness of other controls within a company.
An internal audit generally performs the three tasks outlined below.
- Assess any risks and the internal controls within a company
- Ensure that a company and its employees are in compliance with federal and state laws and regulations
- Make suggestions as to what needs to be done to rectify a failed audit or issues that were identified as problematic during the audit
Internal audit is a management control. The department reviews the effectiveness of other controls within a company.
It is part of the control systems of a company, with the aim of ensuring that other controls are working correctly.
In some regimes, it is a statutory requirement to have internal audit. In others, codes of corporate governance strongly suggest that an internal audit department is necessary.
The work of internal audit is varied – from reviewing financial controls through to checking compliance with legislation.
The department is normally under the control of a chief internal auditor who reports to the audit committee.
A rapidly expanding enterprise needs to monitor compliance with human resource laws and other laws.
Designing a credit policy with the intention of reducing bad debt.
Small businesses lose millions every year to employee theft. Types of fraud committed by employees include skimming payments from customers, check tampering, cash theft, misuse of company credit cards and improper payroll transactions.
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