Internal audit refers to a systematic and independent evaluation of the operational and financial aspects of an organization with the aim of assessing compliance, efficiency, and the effectiveness of internal controls. The internal audit process is typically conducted by an internal audit team or department within the organization, which operates independently of the functional areas being evaluated. Internal audits help ensure compliance with laws, regulations, and corporate policies, and they may identify areas for cost reductions, performance improvements, or risk mitigation measures.

For example, an internal audit in the finance department might identify discrepancies in the reconciliation of accounts or ensure adherence to accounting policies. Another example is where internal audits are utilized in reviewing adherence to month end closing processes, such as those utilized in financial reporting or balance sheet reconciliations. Internal audits also play a crucial role during month-end or year-end financial reviews to ensure that all reported figures are accurate and properly accounted for.

In summary, internal audits are vital in maintaining organizational integrity and efficiency. By identifying weaknesses and recommending improvements, the internal audit function facilitates robust governance structures and supports long-term organizational success.