Literature Review Of Related Literature On Internal Auditing

Review of Related Literature

Internal Auditing

There has been an increased demand for internal auditing as organizations and business environment are becoming more complex, which brings the need to assess different business risks (Allegrini, et. al, 2009). With the increase of complex business environment, more pressure will be put on the profession of auditing. The Institute of Internal Auditors (IIA) defined internal auditing as follows:

Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization 's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Internal auditing helps an enterprise in several ways. As stated by Angelova and Koleva (2000), it helps in a more efficient decision-making and gives reasonable assurance to the management regarding its operations. Additionally, it also assists the management with an effective discharge of responsibilities, helps give advice, information and recommendation, contributes to performance improvement, and assists the management with the achievement of its objectives and goals. According to them, internal audit has an important role in managing the risks of an enterprise. Having an internal audit function helps to identify the potential risk that could arise which might harm an enterprise. Hence,