Internal auditing is the process done within a company or organization that analyzes the company or organization's operations. The purpose of an internal audit is to determine how the company can better use its resources and become more profitable or to identify and mitigate potential risk. Another goal of internal auditing is to minimize costs from within the company so that the revenue-seeking activities done are more profitable. Internal auditing is highly credible and accurate (when done correctly) for determining 'weak' points of an organization, such as high costs, large amounts of risk or poorly allocated resources. Internal auditors are not personally responsible for executing any plans that may be created as a result of an internal audit. The auditor simply presents their findings to the Board of Directors or executive management and then either of these groups will take on the responsibility. The execution of an internal audit requires a very elaborate, methodical plan in order for it to be executed properly and effectively.
Internal assurance services are done for the purpose of providing management more information regarding the operations of their company. With this additional information, is it assumed that management will be able to make more informed decisions regarding the operations within the company. If an external company is hired to do the internal audit, they will usually produce a report including all evidence uncovered through their research within the company. Internal assurance services are different from external insurance services in the sense that external services are similar to management consulting.© BrainMass Inc. brainmass.com August 14, 2020, 10:58 am ad1c9bdddf