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Internal audits are conducted at the bequest of internal management in order to check the health of a company’s finances, and analyze operational efficiency of the organization. Internal audits may be performed by an independent party or by the company’s own internal staff.
In India, every company whose shares are registered on the stock exchange must have an internal auditing system in place. For a company whose shares are not listed on the stock exchange, but whose average turnover during the previous three years exceeds INR5 crore, or whose share capital and reserves at the beginning of the financial year exceeds INR50 lakh, must have an internal auditing system in place. The statutory auditor of the company must report on the internal auditing system of the company in the audit report.
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