Internal audit - strengthen your controls and processes

Internal audit is an independent, objective assurance activity designed to add value and improve an organization's operations. It evaluates risk management, control, and governance processes.

Yes, for listed companies and certain unlisted companies meeting specified thresholds under Section 138 of the Companies Act, 2013. Other companies may voluntarily conduct internal audits.

A Chartered Accountant, Cost Accountant, or any other professional as may be prescribed, can perform internal audit. For listed companies, only a CA can act as internal auditor.

Statutory audit focuses on financial statements and is mandatory for all companies. Internal audit covers operational processes, controls, and risk management. Statutory audit is for shareholders; internal audit is for management.

Internal audit covers financial controls, operational processes, IT systems, compliance with laws and regulations, risk management frameworks, and governance practices.

Typically 20-30 working days for a comprehensive audit, depending on the size and complexity of your organization. Smaller scopes can be completed in 1-2 weeks.

An audit opinion is the auditor's conclusion about whether the financial statements are presented fairly. Types include unqualified (clean), qualified, adverse, and disclaimer of opinion.

Yes, internal audit is designed to detect fraud and irregularities. However, it provides reasonable assurance, not absolute assurance, as sophisticated frauds may involve collusion or management override.

Internal audit evaluates the effectiveness of risk management processes, identifies emerging risks, and provides recommendations to strengthen risk mitigation strategies.

Yes, the internal audit report is a confidential document shared with the audit committee and management. It is not disclosed to external parties unless required by law.

Internal audit should be conducted at least annually. High-risk areas may require more frequent audits - quarterly, monthly, or even continuous monitoring through automated tools.

ICAI has issued Standards on Internal Audit (SIA) that provide guidance on planning, executing, and reporting internal audits. These include standards on independence, due professional care, quality control, and reporting.

Internal audit covers all business processes, while GST audit specifically focuses on GST compliance - verifying input tax credit claims, tax calculations, and compliance with GST law provisions.

No. An internal auditor must be independent of the operations they audit. The internal auditor reports to the audit committee or board, not to the management whose work they review.

Management reviews the findings, develops action plans, and implements corrective actions. The internal auditor follows up to ensure recommendations are implemented within agreed timelines.