Internal Audit directly reporting to the audit committee: Enhancing users’ confidence in financial reporting

Abstract

An internal audit report is the ending result of an internal audit process. The report refers to different contents that will
have an impact on both internal and external users. However, the report’s effectiveness can be made by the model of an
internal audit department within a business in which it defines who is provided with the report.
A general model of an internal audit department for almost businesses is an independent department under the audit
committee that is managed by either board of directors or operating management. The organizational model will take
an effect on users’ confidence of financial information. In the study, I focus on identifying the critical role of an audit
committee and explaining why the model of internal audit directly reporting to the audit committee can be a significant
step toward restoring users’ confidence.