Audit in terms of Independence, Organizational Characteristics and Internal Relationships

Abstract

The internal audit function's efficiency is greatly influenced by relationships, organisational characteristics, and internal audit independence. Independence is the capacity of the internal audit function to operate impartially and unbiasedly. By ensuring that the internal audit function has a clear reporting line to the board of directors or audit committee, as well as the resources and independence necessary to carry out its responsibilities, this is achieved. To evaluate the organization's risk management, control, and governance methods fairly, internal audit must be impartial. Organizational aspects include the internal audit function's structure, reporting lines, and resources. These characteristics are essential to guaranteeing the internal audit function can carry out its responsibilities and provide a fair assessment of the organization's risk management, control, and governance systems. The organisational characteristics should support and be consistent with the main objectives and strategy of the company. Internal relationships are interactions and connections between the internal audit function and other organisational entities. The internal audit function's capacity to carry out its responsibilities effectively and provide an unbiased assessment of the company's risk management, control, and governance systems depends on these relationships. These partnerships' essential components include coordination, collaboration, compliance, and efficient communication. To make sure that the organization's overall goals are realised, the internal audit function should closely collaborate with other organisational departments like finance, operations, and risk management. In order for the internal audit function to be able to give an objective and useful review of the organization's risk management, control, and governance procedures, it is crucial that internal audit independence, organisational characteristics, and internal relationships all be present. They all play a vital part in ensuring that the internal audit function can recognise risks, take steps to reduce them, and reassure the management and other stakeholders of the company.