internal audit
Internal Audit is the regular, in house check that makes sure a company's money, records and controls are doing what they are supposed to do.
In plain English
Think of a family that owns a small chain of shops around Lagos. Every so often, one of the trusted senior children goes round to each shop, not to steal anyone's job, but to check that the till figures match the receipts, that stock on the shelf matches what the books say, and that nobody's cousin is calmly helping themselves to soft drinks from the fridge.
That is internal audit. It is a function inside a company, staffed by the company's own people or a team it hires to sit inside, whose job is to check that money is handled properly, records are accurate, and rules are actually being followed rather than just written on a wall somewhere.
A bank in Nigeria might have an internal audit team that spends a week going through a branch's loan files, checking that every approved loan actually followed the credit process, and that nobody bent the rules for a friend. In the UK, a listed retailer's internal audit team might review how stock losses are tracked across stores, calmly flagging a branch where shrinkage looks higher than it should be.
It is different from the external audit that produces the numbers shareholders see once a year. Internal audit works all year round, reporting to management and the board, catching small problems before they become the kind of scandal that makes the news.
For a Nigerian professional sending money home to fund a family business, it is worth asking whether that business has any internal check at all, even an informal one. A shop with someone watching the till honestly is a shop that keeps more of what it earns.
A supermarket chain with ₦2 billion in yearly sales has an internal audit team that visits each branch quarterly. In one branch, they find that ₦850,000 worth of stock cannot be accounted for. Because it was caught early, management retrains the store staff and fixes the stock counting process before it becomes a pattern across all branches.
Questions people ask
Is internal audit the same as the external auditor a company hires yearly?
No. The external auditor is independent and reports mainly to shareholders once a year on the financial statements. Internal audit works inside the company all year, checking processes, controls and records, and reports mainly to management and the board.
Do small businesses need internal audit?
Not a formal department, no, but every small business benefits from someone other than the owner regularly checking stock, cash and records. It does not need a fancy title to be useful.
Can internal audit stop fraud completely?
No system stops fraud completely, but a good internal audit function makes fraud harder to hide and much more likely to be caught early, before the losses grow large.
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