Internal audit is a vital tool for the effective governance of any organisation. It is essential for helping boards to understand what’s happening on a day-to-day basis and whether this aligns with the risk appetite of the organisation. Without it, boards must essentially feel their way in the dark, relying solely upon what senior management tells them.

This is problematic as, depending on the size of the organisation, chief executives tend to have a broad, top-down view and themselves rely on what middle management reports up to them. In rare cases the chief executive and other members of the executive may intentionally misreport to the board in order to cover up mismanagement for which they are responsible.