Which statement about internal audits is true?

Which statement about internal audits is true?

• A. An internal audit is performed by someone who works for the organization being audited.
• B. An internal audit is performed only when requested by the governing body.
• C. An internal audit is an audit done by someone who does not work for the organization being audited.
• D. An internal audit is always conducted by external independent CPAs.

Answer: (A)

An internal audit is performed by someone who works for the organization being audited. That means the auditor is part of the entity—often a staff member or an internal auditor—and uses access to the organization’s records and processes to review internal controls, risk management, and governance practices from inside the organization. The goal is to help the organization improve its operations and compliance, with the audit function integrated into its own structure and reporting lines. This differs from the other scenarios: internal audits aren’t limited to being requested by the governing body; they’re typically part of an ongoing program, planned or triggered by risk considerations or governance needs. An internal audit isn’t done by someone who does not work for the organization—that would describe an external audit conducted by independent parties. And internal audits are not always conducted by external independent CPAs; when internal, the work is usually carried out by the organization’s own staff or by contractors working for the organization.

An internal audit is performed by someone who works for the organization being audited. That means the auditor is part of the entity—often a staff member or an internal auditor—and uses access to the organization’s records and processes to review internal controls, risk management, and governance practices from inside the organization. The goal is to help the organization improve its operations and compliance, with the audit function integrated into its own structure and reporting lines.

This differs from the other scenarios: internal audits aren’t limited to being requested by the governing body; they’re typically part of an ongoing program, planned or triggered by risk considerations or governance needs. An internal audit isn’t done by someone who does not work for the organization—that would describe an external audit conducted by independent parties. And internal audits are not always conducted by external independent CPAs; when internal, the work is usually carried out by the organization’s own staff or by contractors working for the organization.