Internal auditor

Definition

An internal auditor is a professional who evaluates and improves the effectiveness of risk management, control, and governance processes within an organization. They ensure that financial reporting and operational procedures comply with regulatory standards and organizational policies.

5 Must Know Facts For Your Next Test

1. Internal auditors provide an independent assessment of an organization's operations and controls.
2. They play a critical role in identifying inefficiencies, fraud risks, and areas needing improvement.
3. Internal auditing involves both financial and non-financial aspects to ensure comprehensive oversight.
4. They often report their findings directly to the board of directors or audit committee.
5. Strong analytical, communication, and ethical skills are essential for internal auditors.

Review Questions

• What primary functions does an internal auditor perform within an organization?
• How do internal auditors contribute to risk management?
• Why is it important for internal auditors to maintain independence from other departments?

Related terms

External Auditor: A professional who examines financial statements to ensure they are accurate and comply with GAAP.

Risk Management:

The process of identifying, assessing, and controlling threats to an organization's capital and earnings.

Governance: The framework of rules, relationships, systems, and processes within which authority is exercised in organizations.