As the name suggests, it is an audit of internal affairs; the audit is carried out to decide if the inner part of the organization is as per the rules and regulations or not. In this type of audit, the auditors check if the organization follows proper norms, laws and whether it complies with all the internal regulatory criteria. The internal audit can be done by anyone, even by the organisation's employee, and that's where it lacks, the employee can cover things up, and it is not as thorough as an external audit.
2. External Audit:
External Audits can be compulsory to some organizations as per some rules and requirements of shareholders. The external audit report shall also be shown to all the shareholders in annual general meetings and board of directors meetings. The external audit is done by some independent professional person who possesses such qualifications mentioned in the rule. External audits can be done annually, half-yearly or quarterly. If some of the organization feels that something is not adequately visible to seniors, then they can also conduct an external audit. The organization can also appoint a third party to conduct an audit.
3. Financial Audit
As discussed above, a financial audit is essential for the organization as the shareholder invests money in the business. They need to know if their money is being properly used. Money is the profit for the company and making a profit is one of the objectives of a business, and it is an income for the organization. A financial audit is an audit of the books of accounts to know if the organization is expressing the actual charges or hiding some facts from their investors.
Information Technology Audit (IT Audit) is carried out to assess the organization's IT infrastructure and know the organisation's system. It is done to inform the stakeholder's that the organization's IT structure is up to date, and it is also able to meet the goals and objectives. To see if there are any IT risks. Nowadays, IT audit is standard as an increase in nature, types and many types of IT risks and increasing the complexity of the IT infrastructure.
5. Statutory Audit:
The organization conducts this audit to see if the organization complies with all the Government regulations. It is verified by the external auditor while doing the external audit and also demonstrates some of the financial reports, which includes:
1. statements of the bank;
2. number of clients;