How to Distinguish the Types of Internal Audit

There are several types of internal audits. There are financial audit, operational audit, management audit, compliance audit, IS audit and investigation audit. Each audit has different purpose and characteristic.

Financial Audit

The purpose is express opinion on financial condition based on analysis, comparisons and test of accuracy. Its scope is on the financial records. The expected results from this audit is to give opinion on the accuracy and reliability of the financial statements.

Operational Audit

The purpose is to analyse and improve methods of operations and performance. Its scope on the operational activities of a unit or department. The expected results from this audit is to give recommendations to management for the improvement of operations.

Management Audit

The purpose is to review and evaluate business and management issues to enhance profitability. Its scope is on the business support activities of a unit or the entire organisation. The expected results from this audit is to give opinion on strategic issues and recommendations or solutions.

Compliance Audit

The purpose is to express opinion as to adherence to internal policies and regulatory rules and requirements and applicable laws. Its scope on the specific aspects of operations and business. The expected results from this audit to make immediate rectification and compliance thereafter.

IS/IT Audit

The purpose is to audit on the computer systems and the provision and management of information. Its scope is on the technical reviews on computer systems and their peripherals . The expected results from this audit is to give recommendations on computerisation and information systems related.

Investigation Audit

The purpose is to audit in dept into irregularities such as misappropriation of bank’s assets or reported fraud or allegations. Its scope is in the area specified to determine modus operandi. The expected results from this audit is to give conclusion to findings with recommendations to prevent recurrence.

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2 Responses to “How to Distinguish the Types of Internal Audit”

  1. HEMANT BAJPAI Says:

    proper information of audit system.types and working of audit.

  2. Abeer Ali Says:

    This post was very beneficial to me….

    Thank you for sharing it ….

    Abeer Ali
    Sharjah chamber of Commerce and industry

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