What characterizes an Internal Audit?

An Internal Audit is characterized by being conducted by individuals or teams within the organization, rather than an external agency. This means that it is initiated and engaged by the organization itself, which allows for a comprehensive and independent assessment of its operations, controls, and risk management processes. Internal Auditors typically have a deep understanding of the organization's structure and functions, enabling them to provide insights that drive improvements and compliance with internal policies and procedures.

The primary goal of an Internal Audit is to evaluate the effectiveness of internal controls, governance processes, and risk management, ultimately helping the organization achieve its objectives, enhance accountability, and improve operational efficiency. This focus on internal processes distinguishes Internal Audits from external audits, which are performed by independent third-party firms primarily for compliance with external regulations and standards.