Internal audit is an audit to provide independent assurance to the Management of the Company, that in the Company organisation’s risk management, governance and internal control processes are operating effectively. It is an audit of Internal Control System of the Company for ensuring the quality and functioning of such system and update the relevant authorities of the company about the possible improvement in the system
The requirment of Internal audit is as per the Statute, every listed and unlisted is required to appoint an internal auditor based on the following requirements.
For Listed Company : Internal Audit is must for all the listed Companies without any specific criteria or threshold.
For Unlisted Company : Unlisted Company are required to appoint an internal auditor if
For Private Limited Company are required to appoint an internal auditor if
Apart from the above, if any Company does not fall under the mandatory requirement and it still wilsh to conduct internal audit for batter management and control, that Company can also appoint internal auditor
There is a misconception that internal audits are only necessary for larger, more complex organisations and the cost of an internal audit is higher than its benefits for a smaller entity. As the internal audit’s purpose is to evaluate and improve the effectiveness of an organisation’s risk management, control and governance, an internal audit is beneficial to all entities irrespective of the size of the business. Internal Audit is necessary for all type of well organised businesses.
Advantages of Internal Audits are: