ACCA SBL Syllabus F. Organisational Control And Audit - Internal Audit - What and When - Notes ^{1 / 8}

Internal Audit

• What is Internal audit?

  • Internal audit is a management control, where all other controls are reviewed

  • Sometimes it is a statutory requirement

  • Codes of corporate governance strongly suggest it

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

• When is internal audit needed?

  1. Large, diverse and complex organisation

  2. Large number of employees

  3. Cost benefit analysis required

  4. Changes in organisational structure

  5. Changes in key risks

  6. Problems with existing internal control

  7. Increased number of unexplained events