How internal audit functions support oversight
Launch library · evergreen read
An internal audit function reviews an organisation's own processes and controls from the inside, checking whether they are actually working as designed rather than simply assuming they are because a policy document says they should be. It sits apart from external audit, which focuses mainly on the accuracy of published financial statements.
Internal auditors typically work through a planned schedule, examining areas such as procurement, payroll and expense claims on a rotating basis, supplemented by targeted reviews when a particular risk or red flag has already been identified and genuinely warrants closer, more immediate attention than the standard rotation would otherwise allow.
For internal audit to function effectively, it generally needs to report to a genuinely independent committee rather than to the very managers whose work it is reviewing, since a function that reports upward through the people it examines faces an obvious and difficult conflict when a serious finding actually needs to be raised.