Your Ask Joey ™ Answer

What is internal audit?

What does the internal audit team do?

Internal audit is a function, typically within a public company, that is responsible for evaluating the design and operating effective of a company’s internal controls. The procedures performed by internal audit are very similar to what the external auditor would perform, however, internal audit is not considered to be independent.

Does the internal audit team assess financial statements?

No, the internal audit team would not assess whether the financial statements are free from material misstatement. Again, internal audit focuses primarily on the company’s internal controls. Many of these controls are related to financial reporting, but they may also related to other aspects of the business.

What is the benefit of having an internal audit team?

The benefit of having an internal audit team is that they can help identify issues before the external audit team does. If the external audit team finds issues with the company’s internal control framework, those issues might have to be reported to the public in the company’s public financial statements.

Back To All Questions

You might also be interested in...

  • Are internal auditors considered independent?

    No, absolutely not. Internal auditors are not considered independent and internal auditors should not be used in place of external auditors. The external audit team can use the work of internal audit as long as the external audit team has appropriately evaluated the competency, objectivity, and the quality of the work performed by the internal...

  • How can I assess whether the internal audit team is competent?

    In order to use the work of internal audit, the external audit team needs to assess the competency of the internal audit team. The external audit team can assess competency by reviewing resumes to understand their educational background and professional credentials (i.e. CPA). The external audit team can also review the work performed by the...