ELI5: What is an Internal Audit?
It’s like your older sibling checking your homework before your parents do. The company’s own team inspects security to catch problems early, before an outside inspector shows up.
Definition
An internal audit is an independent assessment conducted by the organization’s own internal audit function or information security team, evaluating the effectiveness of controls, compliance with policies, and alignment with regulatory requirements. While internal auditors work for the organization, their independence comes from reporting to the audit committee or board (not to line management) and following professional standards (IIA standards). Internal audits provide ongoing assurance between external audits.
Key Details
- Internal audits are typically more frequent than external audits (quarterly or ongoing vs. annual)
- Internal auditors can access systems and staff more easily than external auditors, enabling deeper testing
- Independence is maintained by having the internal audit function report to the audit committee or board, not to IT management
- Internal audit findings drive remediation activities tracked in the risk register
- Exam tip: internal audits provide management assurance; external audits provide third-party assurance to external stakeholders
Connections
- Parent: audits-and-assessments — internal audits are the ongoing assurance mechanism between external assessments
- See also: external-audit
- See also: findings-and-remediation