What is the primary purpose of an internal audit?

The primary purpose of an internal audit is to provide an independent assessment of risk management effectiveness. This role entails evaluating the adequacy and effectiveness of the organization's internal control systems and processes in managing risks. Internal auditors help ensure that risks are identified, assessed, and managed appropriately, which is crucial for maintaining the organization's integrity and financial health. By conducting independent reviews, internal auditors offer insights that can enhance decision-making and improve overall governance.

While compliance with laws and regulations, improving productivity, and reducing operational costs are important aspects of organizational management, they are not the core objective of internal audits. Instead, these functions can be influenced by the findings and recommendations from internal audits, but the fundamental focus remains on the effectiveness and efficiency of risk management and internal controls.