Page 171 - SBL Integrated Workbook STUDENT 2018

Audit and compliance

Internal audit

1.1 Function and importance of internal audit

Internal audit is a management control reviewing the effectiveness of
controls.

 It is part of the control systems of a company, with the aim of ensuring that
other controls are working correctly.

 In some regimes, it is a statutory requirement to have internal audit. In others,
codes of corporate governance strongly suggest that an internal audit
department is necessary.

 The work of internal audit is varied – from reviewing financial controls through to
checking compliance with legislation.

 The department is normally under the control of a chief internal auditor who
reports to the audit committee.

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