The internal audit function usually reports to the board of directors or the audit committee. It differs from independent audit in that its scope is not limited to the financial statements and it operates continuously from within the organisation (or through outsourcing). Internal audit can also be outsourced.
Related terms
Internal controlProcesses and controls designed by management to provide reasonable assurance regarding the effectiveness of operations, the reliability of financial reporting and compliance with laws and regulations.Audit committeeA committee of the board of directors responsible for overseeing financial reporting, internal control, internal audit and the independent audit.Independent auditReasonable assurance provided by an independent auditor on whether the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.Compliance auditAn examination of whether an organisation's activities are carried out in accordance with the relevant laws, regulations, contracts or internal rules.Compliance officerThe authorised person responsible for running the compliance programme for the prevention of money laundering and terrorist financing at an obliged entity.Compliance programmeThe full set of policies, procedures, controls, training and monitoring activities an organisation puts in place to ensure compliance with laws and internal policies.
Last updated: October 22, 2026 · This definition is for general information only.