Despite numerous benefits, internal audit has got some limitations. Discuss.

Limitations of Internal audit includes the following: The installation and operation of internal audit involve extra expenditure which cannot be met by many small concerns. As a matter of fact, internal audit is confined to larger business. The limitation of internal audit starts when there is time lag between recording and checking of entries. The accounting and internal audit must go side by side with minimum time gap. Internal audit becomes as better as it is used as managers. There are occasions when managers cannot accept the finding of internal audit and take consequent actions. This defect arises mainly from the deficiencies of the internal auditing staff, because of their advisory staff position, unfamiliarity with operating aspects of work and accounting bias, internal auditors fail to be of any real help to the manager in many cases. Internal audits are employed by the organization and this can be impair their independence and objectivity and ability to report fraud/error to senior management because of perceived threats to their continued employment within the company to ensure the transparency. Best practice indicates that the internal audit should report both to management and those charged with governance (audit committee). Internal auditors are not required to be professionally qualified and so there may be limitations in their knowledge and technical expertise.