Internal Audit Opinion:
Internal auditors normally issue their reports to related parties such as the auditee, audit committee, and board of directors. Internal audit normally does not provide the opinion like external audit, but it usually concludes what they found during the cause of internal audit.
For example, the significant internal control matters, non-compliance with internal policies and regulations. In general, the conclusion of the opinion of the internal audit is prepared mainly based on the scope of the internal audit and its objective.
Suppose auditors assign to review the internal control over inventories management of the entity, then at the end of their audit. In that case, they will raise all the internal control weaknesses and significant matters related to inventory management and their recommendation and implication.
Here is the quote of Internal audit Opinion based on Internal Audit Standard, Engagement OpinionThe rating, conclusion, and other description of results of an individual internal audit engagement, relating to those aspects within the objectives and scope of the engagement.
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For example, the internal audit department is assigned to conduct internal audit activities in the payroll department due to some concerns from the audit committee and board of directors.
Then, after the cause of its audit activities, the internal audit department needs to issue an audit report, maybe based on the entity’s structure, to the GM or Director and head of HR on the result of their audit.
This report should provide the conclusion of significant problems found and the rating of relevance control. The internal audit report also needs to communicate to the audit committee and board of directors.
So, in conclusion, the internal audit did not issue the opinion like an external audit. Still, it also issued the audit report, which raises out all the findings, implications, and recommendations along with the audit rate. Audit rating is provided based on the nature of risks and subsequent risks that might affect.
Does internal audit review financial statements?
The scope of the internal audit includes financial audit, operational audit, compliant audit, fraud investigation, risks management review, and so on. In general, the annual audit coverage, which results from annual risks assessments, will determine whether internal audits cover the review of financial statements. If the risks are high and the internal auditor wants to address the risks, then an internal audit also reviews the financial statements. However, the report from the internal audit should be used for statutory’s compliant purposes.