Page 157 - AA Integrated Workbook STUDENT 2018-19

Internal audit

Need for internal audit

Internal audit is an independent, objective assurance and consulting
activity designed to add value and improve an organisation’s
operations.

Companies must create a strong system of internal control in order to fulfil their
responsibilities.

Internal audit will evaluate the controls to ensure they are effective.

An internal audit department can be expensive to set up and run therefore the need
for one will depend on:

 Scale and diversity of activities

 Complexity of operations

 Number of employees

 Cost/benefit considerations

 The desire of senior management to have assurance and advice on risk and
control

 Current control environment – history of fraud or control deficiencies

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