What is a common outcome of an effective internal audit?

An effective internal audit typically leads to enhanced organizational governance. This improvement is crucial because internal audits provide management with an objective evaluation of risk management, internal controls, and overall governance practices. By identifying areas for improvement, internal audits help organizations align their operations with strategic goals, ensure compliance with regulations, and enhance accountability within the organization.

Furthermore, a robust internal audit function helps establish a culture of integrity and transparency, fostering trust among stakeholders, including employees, management, and the board. Through ongoing assessment and recommendations, internal audits also promote best practices and continuous improvement, contributing to the overall effectiveness of governance structures. This outcome underscores the vital role that internal audits play in securing the organization’s integrity and improving its overall performance.

Other outcomes, such as increased operational costs or reduced financial transparency, would adversely affect an organization and are not typical results of effective audits. Additionally, more frequent regulatory violations contradict the purpose of internal audits, which aim to identify and mitigate risks to compliance.