INTERNAL AUDIT

What is internal audit?

The role of internal audit is to provide independent assurance that an organization's risk management, governance and internal control processes are operating effectively.

What do internal auditors do?

We have a professional duty to provide an unbiased and objective view. We must be independent from the operations we evaluate and report to the highest level in an organization: senior managers and governors. Typically this is the board of directors or the board of trustees the accounting officer or the audit committee. To be effective the internal audit activity must have qualified, skilled and experienced people who can work in accordance with the code of ethics and the international standards. The nature of internal auditing its role within the organization and the requirements for professional practice are contained within the international professional practices framework (IPPF). The components and the detailed content of the IPPF are available in the global professional guidance area of the website.

The difference between internal and external audit 

While sharing some characteristics internal and external audit have very different objectives. These are explained in the table below: 

	External audit	Internal audit
Reports to	shareholders or members who are outside the organisations governance structure.	The board and senior management who are within the organisations governance structure.
Objectives	Add credibility and reliability to financial reports from the organisation to its stakeholders by giving opinion on the report	Evaluate and improve the effectiveness of governance, risk management and control processes.  This provides members of the boards and senior management with assurance that helps them fulfil their duties to the organisation and its stakeholders.
Coverage	Financial reports, financial reporting risks.	All categories of risk, their management, including reporting on them.
Responsibility  for improvement	None, however there is a duty to report problems.	Improvement is fundamental to the purpose of internal auditing. But it is done by advising, coaching and facilitating in order to not undermine the responsibility of management.