What is Independent Internal Audit?
Internal audit is an independent assurance function inside a company that evaluates how well risk management, controls, and governance are working. Internal auditors report to the audit committee, not to the executives whose work they review, which is what makes the function independent.
How It Works
- Plans an annual audit program based on the top risks
- Tests controls in finance, operations, IT, and compliance
- Reports findings and recommended fixes to the audit committee
- Follows up to confirm management actually closes the gaps
- Works to the Institute of Internal Auditors (IIA) standards
Saudi Context
In Saudi Arabia, the CMA Corporate Governance Regulations require companies listed on Tadawul’s Main Market to have an internal audit unit or department reporting to the audit committee (Articles 71 and 73); on the Parallel Market (Nomu) those provisions are guiding rather than mandatory. Banks and insurance companies fall under additional SAMA and IA rules that specify scope, independence, and reporting lines.
Example
The internal audit team at a Saudi telco audits the procurement process. They find that 12% of supplier contracts were renewed without competitive bidding. The audit committee orders procurement to fix the policy, and the auditors confirm the fix in a follow-up review six months later.