The internal audit process can be defined as: “An independent and objective activity that provides assurance and advisory services to add value to the organization and improve its operations, which helps to achieve the objectives of the institution through a systematic approach to evaluating and improving the effectiveness of governance, risk management and control processes.”

From the above definition, we can distinguish a number of key points:

1. Independence and objectivity

The internal audit function is usually accountable to the Board of Directors or the Audit Committee. This relationship is the key point in the independence of the internal audit function. Internal auditors are independent when they are able to conduct their business freely and objectively. The independence is that there are no circumstances that threaten the ability of the internal audit activity or the head of internal audit to exercise internal audit responsibilities without bias. In order to achieve the degree of independence necessary for the effective conduct of internal audit activities, the internal audit chief’s relationship must be directly with senior management and the board of directors.

Objectivity is a way of thinking that allows auditors to perform audit functions so that they believe in the validity of their work results and that they do their job without having to compromise on the quality of their tasks.

2. Confirmation and consulting services

Emphasis is the objective examination of processes, documents and any other evidence to assess risk processes, controls, and governance. Advisory services focus on providing added value and helping the organization to improve its operations. Advisory services usually focus on either a specific operation or work area.

3. Process improvement

As a result of the organization’s internal audit position, the internal auditors have a distinct knowledge of the operations of the organization. This knowledge about the processes, risks and controls of the organization enables them to contribute to improved processes. Auditors typically have extensive knowledge in terms of controls, risk, and efficiency, as well as their ability to solve problems. This knowledge is of value to the organization.

4. Evaluate and improve the effectiveness of risk management processes, controls and governance.

Internal auditors use their knowledge, experience and other features, such as independence and objectivity, to assess the effectiveness of the organization’s core controls. Their primary objective is: risk, regulatory controls, and governance. The objective of the evaluation is to help the institution achieve its objectives.

While external audit focuses on the financial aspect. Its primary concern is the risks and controls that affect the validity of the financial statements. In contrast, the focus of internal audit is wider. It focuses on the institution as a whole.

Internal auditors can perform audit functions in the following areas:

• the quality
• Care needed
• Information Security
• Maintain the privacy of information
• Processes
• Financial Statements
• Adherence to standards and regulations

Internal auditing can also provide the following services as advisory services:

• Training the internal control staff
• Create business process plans
• Comparison with best practices
• System Development Review