Significance of Internal Auditing:

Internal auditing refers to an assessment activity managed within a corporation as a check to the entity. Its main function is to monitor control within the corporation. The task of internal auditing is determined by organization itself, and its goals differ from those of the external auditor who is appointed to report independently. The depth and goals of internal auditing vary widely and depend on the volume and structure of the body and the requirements of its administration. Ordinarily, the importance of internal auditing can be seen by one or more of the following:

1) Implementing and monitoring of sufficient internal control. That is the duty of management that demands proper attention on a permanent basis. Internal auditors are ordinarily assigned definite task by management for reviewing controls, monitoring their function and suggesting improvements for them.

2) Inspection of monetary and operational information. This may include review of the means used to recognize, determine, categorize and report such information and definite inquiry into individual items as well as in depth testing of balances, transactions and procedures.

3) Review of the economy, effectiveness and efficiency of operations including non-financial controls of the corporation.

4) Review of fulfillment of laws, regulations and other external requirements and compliance with administration policies and commands.