What is the Difference Between Internal Audit and Internal Control?

The difference between internal audit and internal control lies in their objectives, scope, and frequency. Here are the key distinctions between the two:

Internal Audit:

An internal audit is a function performed at specific times to assess the effectiveness of internal controls, accounting processes, and corporate governance systems within an organization.
It involves evaluating existing controls, ensuring they work as intended, and assessing the internal governance process and system.
Internal audits are conducted by professionals who report their findings to the management and the board of directors.
The scope of an internal audit includes verifying every single component of work.
Internal audits are performed at specific times and are not an ongoing activity.

Internal Control:

Internal control is a system designed, implemented, and maintained within an organization to mitigate risk and achieve business objectives.
It consists of an ongoing system of policies and procedures directed by senior management.
Internal controls are part of the first line of defense, with operational management functions being accountable to senior management.
The scope of internal control includes verifying the work of one person by another, as well as checking work simultaneously while carrying it out.
Internal control is an ongoing activity, not limited to specific times.

In summary, internal audit is a periodic evaluation of an organization's internal controls and governance systems, while internal control is an ongoing system of policies and procedures designed to mitigate risk and achieve business objectives. The two concepts are complementary, with internal audit assessing the effectiveness of internal control systems.

On this page

What is the Difference Between Internal Audit and Internal Control?

Comparative Table: Internal Audit vs Internal Control

Here is a table comparing the differences between internal audit and internal control:

Feature	Internal Audit	Internal Control
Definition	An unbiased, rational assurance and consulting function developed by management.	A system of checks and balances within a company, comprising methods and procedures implemented by management to control risks and achieve business objectives.
Purpose	To objectively evaluate and test the internal control system, identifying any gaps, inefficiencies, or non-compliance.	To ensure that the organization is functioning correctly, data is reliable, and there is adherence to policies and regulations.
Objectives	Assess the effectiveness of governance, risk management, and internal controls.	To safeguard assets, ensure efficient operations, and ensure regulatory compliance.
Scope	Provides independent assurance on the process and control in place, not only about the end process owner but also about the second line of defense, risk management function.	Designs the controls for process owners, who are responsible for implementing and owning the controls.
Reporting	May report directly to the Board of Directors and specifically the Audit Committee to maintain independence and objectivity when assessing other functions.	Implemented by the management and reviewed by the auditor using methods such as narrative records, checklist, questionnaire, and flowchart.
Time of Checking	Conducted at specific times.	On-going system.

Both internal audit and internal control serve different purposes and are essential for an organization's effective risk management and efficient operations.

Guilherme Mazui

Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.