An internal investigation is when a company has some indication or allegation of wrongdoing or improper actions by its employees or corporate officers and the company wants to determine, what, if any, validity there are to these claims.  These allegations can come from an internal company source or from a governmental investigation. Ultimately, the investigation is used to determine if there was any wrongdoing, and, if so, to correct the problem.  At the end of the investigation it may be helpful for a formal report to be generated that identifies the allegation, the nature of the investigation, the findings, whether disciplinary action was taken, and the recommendations for corrective action.
Internal Investigations can be as minor or as complicated as the needs present. They may include interviews, forensic financial audits, document review, and legal analysis / memorandums.