internal audit

Internal Audit

An audit performed by a person (or persons) employed by the firm being audited.

Investopedia Commentary

Internal audits have quickly become an important aspect of corporate governance, thanks mainly to the Sarbanes-Oxley Act of 2002.

See also: Audit, Corporate Governance, Independent Audit, Sarbanes-Oxley Act of 2002

internal audit

The examination of a company's records and reports by its employees. Internal audits are usually intended to prevent fraud and to ensure compliance with board directives and management policies. In contrast, the financial statements presented to stockholders are typically prepared by outside parties to ensure absolute objectivity. Compare external audit.