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Why internal audit? Risk indicators in smaller businesses

Recent UK governance changes are likely to lead to more quoted companies taking a closer look at the way they manage risk and at how they ensure that business practices are effectively supporting their organisation.

Internal audit is common in large organisations but is less prevalent in small and medium-sized businesses, often due to their size. Nevertheless, smaller organisations have other characteristics which may make internal audit appropriate.

External audit is primarily focused on the truth and fairness of the accounts and going concern, whereas internal audit considers whether business practices support the management of risk.