Moamen Omar Ali
MBA, CMA, CIA, CFE
Misunderstood, undervalued, and often misrepresented. Here’s what internal audit really is, and why it’s time to change the narrative.
Introduction:
Despite its growing strategic importance, Internal Audit remains one of the most misunderstood functions in many organizations either in a multinational corporation or a privately held business. You may have heard internal auditors described as compliance checkers, financial reviewers, or even corporate police officers.
These misconceptions don’t just misrepresent the profession, they limit its potential. They discourage talented professionals from joining the field and prevent organizations from leveraging internal audit to improve risk management, governance, and operational performance.
In this article, I’ll unpack the most common myths I’ve encountered throughout my career and offer a clearer view of what Internal Audit is, and what it can be.
Misconception 1: Internal Auditors have to come from audit firms
➡️ Reality: This is a common assumption, especially in organizations where external audit experience is seen as the default qualification. While working in an audit firm builds strong foundations in controls and financial reporting, internal audit is a distinct discipline. It requires a broader understanding of risk, governance, operations, and strategy.
In practice, professionals from industry roles, such as operations, healthcare, or engineering, bring valuable insights that external audit backgrounds may not offer. These individuals understand the realities of business execution, which helps internal audit deliver more relevant and actionable recommendations.
If you’re hiring, don’t limit your search to audit firm alumni. Just look for people who understand the business.
If you’re aspiring to become an internal auditor, know that your industry experience is an asset, not a barrier. Internal audit needs diverse minds, not just traditional paths.
Misconception 2: Internal Auditors must have studied accounting
➡️ Reality: This belief often stems from the traditional view of Internal Audit as a function that primarily reviews financial transactions and accounting records. Historically, internal audit was closely tied to finance departments, and many organizations expected auditors to hold accounting degrees or come from financial backgrounds.
But the reality today is very different. The scope of internal audit has expanded significantly—it now covers IT, operations, cybersecurity, ESG, supply chain, and more. Unless you’re hiring specifically for financial audits, limiting your team to accountants can restrict the function’s ability to address strategic and operational risks.
Modern internal audit requires skills in data analysis, process design, risk assessment, and business acumen, not just accounting. A Chief Audit Executive (CAE) must look beyond number-focused profiles and build a team with diverse expertise.
✅ Takeaway:
The IIA’s Global Internal Audit Standards (GIAS) confirm that Internal Audit is a multidisciplinary profession. Accounting knowledge is useful, but not essential. What matters most is the ability to understand risks, processes, and governance, and that can come from many backgrounds.
Audit leaders should build diverse teams, and aspiring auditors from non-accounting fields should feel empowered to pursue this path.
Misconception 3: Internal Audit is just about policy compliance reviewers
➡️Reality: This outdated view reduces internal audit to a checklist function, where auditors are seen as merely verifying whether employees follow policies and procedures. While compliance is part of the job, it’s far from the full picture.
Modern internal audit is designed to deliver insight, foresight, and value creation. It evaluates the effectiveness of controls, the efficiency of processes, and the alignment of operations with strategic objectives. Auditors today are expected to ask deeper questions:
- Are controls working as intended?
- Are processes optimized?
- Are risks being managed proactively?
This broader role is clearly supported by the 2024 Global Internal Audit Standards, specifically Domain I – Purpose of Internal Auditing, which states:
“Internal auditing strengthens the organization’s ability to create, protect, and sustain value by providing the board and management with independent, risk-based, and objective assurance, advice, insight, and foresight.” – GIAS 2024, Domain I
✅ Takeaway:
If you’re leading an audit function, empower your team to go beyond compliance and explore root causes, process improvements, and strategic alignment.
If you’re entering the field, know that internal audit is about thinking critically, asking the right questions, and helping the organization evolve, not just follow rules.
Misconception 4: Internal Audit only focuses on past history
➡️ Reality: This misconception assumes that Internal Audit is purely retrospective, looking at what went wrong, who made mistakes, and whether past actions complied with policies. While reviewing historical data is part of the job, modern Internal Audit is increasingly forward-looking.
Today’s internal auditors are expected to provide foresight, helping organizations anticipate emerging risks, process vulnerabilities, and strategic misalignments before they materialize. Internal audit contributes to risk awareness, decision-making, and continuous improvement, not just post-mortem analysis.
This shift is clearly supported by the 2024 GIAS, which emphasize internal audit’s role in delivering insight and foresight, not just assurance as stated above in Domain I – Purpose of Internal Auditing.
✅ Takeaway:
If you’re leading an audit function, encourage your team to look ahead, identify risks early, support strategic planning, and add value beyond historical reviews.
If you’re entering the field, know that Internal Audit is not just about the past, it’s about shaping the organization’s future.
Misconception 5: Internal Auditors are the company’s police officers
➡️ Reality: This stereotype paints internal auditors as enforcers, constantly on the lookout for violations, rule-breakers, or wrongdoing. It creates a culture of fear and defensiveness, where employees see auditors as people to avoid rather than partners to engage.
In reality, internal audit is not about policing, it’s about partnering. Auditors are there to help the organization identify risks, improve processes, and strengthen controls. The goal is to support the business, not to punish it.
The 2024 GIAS reinforce this by emphasizing internal audit’s role.
“Internal auditing strengthens the organization’s ability to create, protect, and sustain value…” – GIAS 2024, Domain I
✅ Takeaway:
If you’re in management, encourage a culture where internal audit is seen as a trusted advisor, not a threat.
If you’re an aspiring auditor, focus on building relationships, asking the right questions, and adding value, not just catching people off guard.
Misconception 6: Internal Audit is just a box-ticking function for governance compliance
Some professionals view internal audit as a formality, a function that exists to tick boxes, satisfy governance requirements, and produce reports that rarely lead to meaningful change. This mindset often leads to limited empowerment of auditors and missed opportunities for improvement.
To change this perception, internal auditors must demonstrate their value, by delivering relevant insights, actionable recommendations, and supporting strategic goals. The more value we deliver, the more trust we earn, and the faster this outdated image fades.
✅ Takeaway:
Audit functions must actively challenge this misconception. It’s not enough to say internal audit adds value, we must show it. That means going beyond compliance to deliver insights, recommendations, and support for better risk management, stronger controls, and improved governance environments.
Misconception 7: Internal Audit can only succeed in public companies, not in private businesses
➡️ Reality: It’s true that independence is easier to establish in public companies, where internal audit typically reports to an audit committee or board of directors. In private businesses, internal audit often reports directly to the owner, president, or CEO, which can create conflicts of interest and impair objectivity.
However, this doesn’t mean internal audit can’t succeed in private organizations. It simply means the structure and mindset must be adapted. According to Grant Thornton, private companies that implement internal audit effectively see improvements in risk management, operational efficiency, and governance, even without formal audit committees.
The Internal Audit Code of Practice (2024) also emphasizes that internal audit should be empowered in private organizations, with clear mandates and unrestricted scope. It encourages boards and senior management to set the tone at the top and support internal audit’s role in protecting the organization’s assets, reputation, and sustainability
✅ Takeaway:
If you’re in a private company, don’t dismiss internal audit as a public-sector tool. Instead, design the function thoughtfully, with clear reporting lines, a strong mandate, and leadership support.
If you’re an Internal Auditor working in a private business, focus on building trust, demonstrating value, and navigating independence challenges with professionalism and transparency. Internal audit can thrive anywhere if it’s empowered to do so.
Misconception 8: Internal Auditors are responsible for preventing fraud
➡️ Reality: This is one of the most persistent and misunderstood beliefs about internal audit. When fraud is discovered, the first question often asked is: “Where was internal audit?”
While internal auditors play a role in assessing fraud risks and evaluating controls, they are not responsible for detecting or preventing fraud. That responsibility lies with the company’s management, who own the processes, systems, and culture that either enable or deter fraud.
According to the IIA’s Global Practice Guide: Internal Auditing and Fraud (3rd Edition, 2024):
“Addressing fraud risk is a shared responsibility for everyone, starting at the top and extending throughout the organization.” – IIA Global Practice Guide: Internal Auditing and Fraud
Internal audit is part of the third line of defense, providing assurance that the first and second lines (management and risk/compliance functions) are effectively managing fraud risks.
✅ Takeaway:
If you’re in management, understand that fraud prevention starts with you. Internal Audit can help assess and strengthen fraud-related controls, but it cannot replace ownership of fraud risk.
If you’re an auditor, be clear about your role: you assess fraud risk and the control environment, not act as the fraud police. Educate stakeholders and set expectations early to avoid blame when fraud is discovered.
Conclusion: Time to Rethink Internal Audit
Internal audit is evolving, and so should the way we talk about it. The misconceptions we’ve explored aren’t just outdated, they’re limiting. They prevent organizations from unlocking the full value internal audit can deliver, and they discourage talented professionals from entering a field that’s rich with opportunity.
These myths distort the true purpose of the function. Internal audit today is about insight, foresight, and value creation. It’s about helping organizations manage risks, strengthen controls, and improve governance, not just reviewing the past or enforcing rules.
To move forward, we need to:
- Challenge these misconceptions openly
- Empower audit teams to deliver real impact
- Educate stakeholders on what internal audit really does
- Encourage diverse professionals to join and enrich the field
Internal audit is not a checkbox, it’s a catalyst for improvement. Let’s make sure everyone knows it.
