As the business expands, its complexity increases and hence its functions must be done by different personnel at different levels. But not all businesses are able to maintain a fully fledged internal audit department within its organization structures, yet still the management need to assure themselves that the internal control systems are working as intended.
The objectives of an accounting system are to ensure that all transactions are completely and accurately processed and recorded and the resulting accounting entries are valid. On its own however, the accounting system cannot meet its objective because its manned by human beings who cannot be perfect; and as such may be subjected to errors, frauds or irregularities.
Thus the purpose of internal audit is to ensure that the accounting systems of internal control are working in the business as they were intended to. Internal audit function thus becomes necessary principally to prevent, detect, correct and adequately disclose errors and irregularities in addition to ensuring an efficient and orderly conduct of business adherence to management policies.
Internal audit functions can be done weekly, monthly, or at quarterly intervals depending on the preference of the management. The frequency of the interval chosen would depend on the level of exposure of the business risk of error, misstatement, falsification of record and fraud.