What Are the Types of Internal Audits?

A company can choose to perform an internal audit for almost any reason.
This may lead to an internal financial audit, operational audit, compliance
audit, environmental audit, IT audit, or a special one-time circumstance.

What Is the Role of Internal Audit?

The role of an internal audit is to identify a deficiency or substantiate a
proficiency. For example, a company may issue an internal financial audit to
make sure its internal controls over accounts payable adhere to company
policy. Alternatively, the company may launch an internal environmental audit
to explore how environmental impact its eco-friendly changes had on the
planet last year.

What Is the Internal Audit Process?

The internal audit process entails planning the audit, performing the audit
procedures, compiling the audit report, and monitoring post-audit changes.
Management may choose to expand the scope of an audit at any point of the
audit if findings during the audit cause the scope to shift a different direction.

What Are the 5 C's of Internal Audit?

Internal audit reports often outline the criteria, condition, cause,
consequence, and corrective action. These five areas report why the audit
was performed, what caused the reason for the audit, how the audit will be
performed, what the auditor aims to achieve, and what steps will be taken
after the audit findings are presented.

The Bottom Line

An internal audit is a process that allows a company to self-select an audit
team to carry out the review of its operations. The company can often define
the scope of the internal audit. In addition, the company can often choose
almost any reason to conduct an internal audit. Though internal audits are
less useful for meeting external reporting requirements, they hold tremendous
value for improving internal operations as well as informing management
ways the company can get better.

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