Explanation: A characteristic of an internal audit is that management is responsible for reading and acting upon the internal audit results. An internal audit is an independent and objective evaluation or assessment of the internal controls, processes, or activities of an organization, performed by a group of auditors or professionals who are part of the organization, such as the internal audit department or the audit committee. An internal audit can provide some benefits for security, such as enhancing the accuracy and the reliability of the operations, preventing or detecting fraud or errors, and supporting the audit and the compliance activities. An internal audit can involve various steps and roles, such as:
- Planning, which is the preparation or the design of the internal audit, by the internal auditor or the audit team, who are responsible for conducting or performing the internal audit. Planning includes defining the objectives, scope, criteria, and methodology of the internal audit, as well as identifying and analyzing the risks and the stakeholders of the internal audit.
- Execution, which is the implementation or the performance of the internal audit, by the internal auditor or the audit team, who are responsible for collecting and evaluating the evidence or the data related to the internal audit, using various tools and techniques, such as interviews, observations, tests, or surveys.
- Reporting, which is the communication or the presentation of the internal audit results, by the internal auditor or the audit team, who are responsible for preparing and delivering the internal audit report, which contains the findings, conclusions, and recommendations of the internal audit, to the management or the audit committee, who are the primary users or recipients of the internal audit report.
- Follow-up, which is the verification or the validation of the internal audit results, by the management or the audit committee, who are responsible for reading and acting upon the internal audit report, as well as by the internal auditor or the audit team, who are responsible for monitoring and reviewing the actions taken by the management or the audit committee, based on the internal audit report.
Management is responsible for reading and acting upon the internal audit results, as they are the primary users or recipients of the internal audit report, and they have the authority and the accountability to implement or execute the recommendations or the improvements suggested by the internal audit report, as well as to report or disclose the internal audit results to the external parties, such as the regulators, the shareholders, or the customers. An internal audit is typically shorter in duration than an external audit, the internal audit schedule is published to the organization well in advance, and the internal auditor reports to the audit committee are not characteristics of an internal audit, although they may be related or possible aspects of an internal audit. An internal audit is typically shorter in duration than an external audit, as it is performed by a group of auditors or professionals who are part of the organization, and who have more familiarity and access to the internal controls, processes, or activities of the organization, compared to a group of auditors or professionals who are outside the organization, and who have less familiarity and access to the internal controls, processes, or activities of the organization. However, an internal audit is typically shorter in duration than an external audit is not a characteristic of an internal audit, as it is not a defining or a distinguishing feature of an internal audit, and it may vary depending on the type or the nature of the internal audit, such as the objectives, scope, criteria, or methodology of the internal audit. The internal audit schedule is published to the organization well in advance, as it is a good practice or a technique that can help to ensure the transparency and the accountability of the internal audit, as well as to facilitate the coordination and the cooperation of the internal audit stakeholders, such as the management, the audit committee, the internal auditor, or the audit team.Â