What is Internal Auditing?

Internal auditing has become a more integral part of any public company thanks to the recently enacted Sarbanes-Oxley regulations. Internal auditing covers the quality control procedures performed in-house, rather than an independent audit handled by a third-party accounting firm. An internal auditor is not given the authority to make any changes, but they will advise the management of their findings.

Internal auditing: Why is it important?

The purpose behind internal auditing is to evaluate a company´s procedures and how strictly they adhere to those procedures. Internal auditors are required to be impartial and objective at all times while assessing the company´s compliance. This can often be more difficult for an internal auditor than an independent external auditor. A conflict of interest can easily arise in a situation where the internal auditor must evaluate his or her supervisor or assistants. Ideally, internal auditors should not be given assignments involving their own department or close co-workers.

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