WHY INTERNAL AUDIT IS REQUIRED/ADVANTAGES OF INTERNAL AUDIT :

Management is responsible for establishing and maintaining a system of internal controls within an organization . Internal controls are those structures, activities, processes, and systems which help management effectively mitigate the risks to an organization’s achievement of objectives. Management is charged with this responsibility on behalf of the organization’s stakeholders and is held accountable for this responsibility by an oversight body (e.g. board of directors, audit committee, elected representatives).

A dedicated, independent and effective internal audit activity assists both management and the oversight body (e.g. the board, audit committee) in fulfilling their responsibilities by bringing a systematic disciplined approach to assessing the effectiveness of the design and execution of the system of internal controls and risk management  processes. The objective assessment of internal controls and risk management processes by the internal audit activity provides management, the oversight body, and external stakeholders with independent assurance that the organization’s risks have been appropriately mitigated. Because internal auditors are experts in understanding organizational risks and internal controls available to mitigate these risks, they assist management in understanding these topics and provide recommendations for improvements.