An internal audit is conducted by someone inside the company (Internal Auditor) and usually covers only specific areas or the company operations.

External audit’s main focus is on the accuracy of the financial statements and annual report, while the internal audit has a wide prospective and looks into anything that is important for the organization’s success.

Ensure the authority of the audit team is established- it will enhance the co-operation from the auditees Decide which areas of the company will be audited and the frequency of the audits. Prepare as yearly audit schedule and distribute Determine the purpose of the audit whether it complies with government regulations, quality standards, internal procedures and systems Organize a meeting with the auditors to discuss plan, scope and purpose of the audit Read the documents you are auditing against.

To perform an internal audit all of the financial records shall be given by the treasurer for the audit, including the check-book register, bank statement, deposit slip, cancelled checks, treasurer’s reports, expense vouchers or warrants with bill receipts, the annual treasurer’s report etc.

The external auditor will provide a list of what they will need to examine and will discuss the overall audit process with management or those charged with governance over the audit, but the first thing the company has to do is choose a Certified Public Accountant firm as the auditor. Financial statement audits can only be performed by a CPA.

To conduct an internal audit you should: Decide what you want to achieve Identify risks and review objectives Plan and audit activities Validate the facts and complete the work Develop a deliverable or report that will drive action Follow up

Plan drawn up is the assessment of the risk that is mutually agreed between the internal audit, senior management and audit committee determines the frequency with which particular audits take place.

Internal Audits are necessary to Enhance the size and complexity of businesses Increase the compliance requirements Focus on risk management and internal controls to manage them Unconventional business models Stringent norms implemented by regulators to protect investors Intensive use of information technology Increasingly competitive environment

After the internal audit, Hold an auditors meeting with auditees involved with the audit, discuss the non-conformances and what part is missed Issue the audit report in a timely manner Encourage auditees to take corrective actions again flaws Help and guide those responsible for completing the corrective actions with setting reasonable deadlines Take the feed-back of the auditees and how your audit team were perceived