Definition

Preface to the Standards on Internal Audit issued by ICAI defines “Internal Audit” as follows: “An independent management function, which involves a continuous and critical appraisal of the functioning of an entity with a view to suggest improvements thereto and add value to and strengthen the overall governance mechanism of the entity, including the entity’s strategic risk management and internal control system”.

In simple terms – It is a way of ensuring businesses and public sector organizations use resources efficiently and apply process consistently. Internal auditors assist management with this task by providing a focus on risk management and the implementation of more stringent internal controls to manage prospective risks and vulnerabilities.

Need for Internal Audit

• Increased size and complexity of businesses
• Enhanced compliance requirements
• Focus on risk management – understand risk exposure and internal controls to manage such risks
• Intensive use of information technology
• Need to create greater transparency, establish sound corporate governance

For any kind of assistance, contact Mr.Manohar B V, FCA, MCom @ manohar@mbvca.in / 9916870055