What is Internal Audit Function?
The internal audit function is the in-house team (or outsourced equivalent) that provides independent and objective assurance over an organization’s internal controls, risk management, and governance, with a direct reporting line to the board’s audit committee.
How It Works
- Risk-based annual audit plan approved by the audit committee.
- Audits cover financial, operational, compliance, and technology processes.
- Findings reported with action plans and follow-up cycles.
- Charter document defines scope, authority, and independence.
Saudi Context
Saudi CMA Corporate Governance Regulations require listed companies to establish an effective internal audit function with a written charter and a board-level audit committee. SAMA-regulated banks must follow stricter requirements with at least one IIA-certified senior auditor and quarterly reporting to the audit committee.
Example
A Tadawul-listed Saudi industrial company runs a 12-engagement annual internal audit plan covering revenue cycle, procurement, IT general controls, ZATCA compliance, and Saudization tracking, with the chief audit executive reporting directly to a CMA-aligned audit committee.