What is the primary purpose of an internal audit?

The primary purpose of an internal audit is to evaluate the effectiveness of risk management, control, and governance processes. This role is essential in ensuring that an organization's operations are conducted in alignment with its objectives and in a manner that safeguards its resources. Internal auditors assess whether established risk management strategies are adequate and whether internal controls are functioning as intended. They also review governance processes to ensure they are effective and efficient, thereby supporting the organization's overall strategy and enhancing accountability.

While evaluating financial performance and profitability, ensuring compliance with legal regulations, and preparing financial statements are important aspects of an organization’s operations, they are typically responsibilities of financial accounting, compliance functions, and external auditors, rather than the primary focus of internal auditing. Internal audits are designed to provide independent assurance that the organization is managing risks appropriately and that there are robust internal processes in place to guide decision-making and performance.