The three types of internal audits are:
Financial Audits- A financial audit evaluates the accuracy, reliability, and integrity of financial information within an organization. It manages the organization's financial statements, accounting records, and related processes to ensure compliance with applicable accounting principles, regulations, and internal controls.
Operational Audits- The purpose of operational audits is to evaluate how well the organization utilizes its resources, manages risks, and achieves its objectives. Furthermore, an operational audit's findings and recommendations help management identify improvement areas, implement changes, and enhance overall operational efficiency and effectiveness.
Compliance Audits- A compliance audit evaluates whether a business follows all applicable laws, regulations, and internal policies. It helps the organization with legal and regulatory requirements specific to its industry or jurisdiction. These help organizations ensure that they operate within legal and regulatory boundaries, mitigate risks, and maintain a strong reputation.