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what is Internal AUDIT?

pinak (Investrment Consultancy) (37 Points)

06 June 2008

How to do Internal audit and why is require?

While doing the internal audit whiat kind of step need to be take care?

Please reply immediatelyyyyyyyyy.

Thanks in advance

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2 Replies

Chinmaya Panigrahi (CA student) (0 Points)
Replied 07 June 2008

As the name suggest itself internal audit means audit to check the internal control system of the organisation. it is not compusory but if any organisation wants better internal control and coordination amoong all the department of the organisation then it can go for the same. Internal auditor is just like an employee of the organisation because he has enough time to verify deeply each and every issues and area with in the organisation. If the internal control system of the organisation is good then the statutory auditor may rely upon the internal audit reports but the liabilty of the statutory auditor remains same.

Generally the areas to be focus or the scope is detemined by the client at the time of appointment of the internal auditor itself. The scope of internal auditor is limited as comparing to statutory auditor.

The main difference between the statutory audit and internal audit is statutory audit report is addressed to shareholders of the company on the other hand internal audit report is addressed to the directors of the company.

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Prasanna.Rm (Finance Pro) (110 Points)
Replied 07 June 2008

hi pinak,

a few points to add on,after the appointment of internal auditor,once the scope is defined,the management along with the internal auditor has to decide the intrevals of audit,whether it shld be monthly,quarterly or half yearly,considering the quantum of the audit and its areas.

then on the decided period basis,audit programme is prepared and sent to the management to start the audit.